Oil rises above $101 after OPEC output unchanged
Thursday, June 9, 2011
SINGAPORE (AP) — Oil prices rose above $101 a barrel Thursday in Asia, extending gains from the previous session after OPEC leaders unexpectedly left crude production quotas unchanged.
Benchmark oil for July delivery was up 59 cents to $101.33 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained $1.65 to settle at $100.74 on Wednesday.
In London, Brent crude for July delivery was up 12 cents to $117.97 a barrel on the ICE Futures exchange.
Leaders of the Organization of Petroleum Exporting Countries, a cartel that controls about 35 percent of global crude output, surprised investors by deciding not to boost production quotas at a meeting Wednesday in Vienna. Analysts had expected an increase of between 1 million and 2 million barrels per day.
Saudi Arabia, the group’s biggest supplier, seeks an oil price range between $70 and $80 and supported an output hike. Meanwhile, Iran, the second-largest producer, and other OPEC members such as Venezuela and Algeria, sought to keep quotas unchanged. OPEC said the group was unable to reach a consensus and will discuss production levels again at its next meeting in three months.
Saudi oil minister Ali Naimi called the meeting “one of the worst ever.”
Analysts expect Saudi Arabia would likely raise its production independently if crude prices jump much higher above $100.
“We suspect that if prices pick up any further, those members that did want to increase quotas, led by Saudi Arabia, will simply increase supply anyway,” Capital Economics said in a report.
In other Nymex trading in July contracts, heating oil fell 0.4 cent to $3.09 a gallon and gasoline dropped 1.0 cent to $2.99 a gallon. Natural gas futures slid 1.7 cents to $4.83 per 1,000 cubic feet.