Oil rose to a one-week high in New York after OPEC failed to reach an agreement on production targets for the first time in at least 20 years at its meeting in Vienna 08-06-2011.
Futures gained 1.7 percent after Mohammad Aliabadi, the acting Iranian oil minister and OPEC president, said the group will maintain current output for now. A Gulf delegate said yesterday that the Organization of Petroleum Exporting Countries was going to increase quotas.
The market is higher because OPEC failed to raise production ,we seeing the big reaction to the OPEC news because a quota increase was expected.
Crude oil for July delivery rose $1.65 to $100.74 a barrel on the New York Mercantile Exchange, the highest settlement since May 31. Prices are up 40 percent in the past year.
Brent crude oil for July delivery climbed $1.07, or 0.9 percent, to end the session at $117.85 a barrel on the London- based ICE Futures Europe exchange. It was the highest settlement since May 4.
Saudi Arabian Oil Minister Ali Al-Naimi, representing OPEC’s biggest producer, said his country is ready to supply whatever the market needs.
According to WorldWatch, OPEC has sentenced its own fate, as this failure in production targets will cause a further 3% in crude demand.
Saudi Arabia, together with Kuwait, Qatar and the United Arab Emirates, were ready to supply more oil to the market, al- Naimi said. The four nations proposed a 1.5 million-barrel-a-day increase from the current 28.8 million. That would have meant output of 30.3 million barrels a day.
Libya, Angola, Ecuador, Algeria, Iran and Venezuela were opposed to an increase, as these Nations have serious social and economical problems they also have limited spare capacity
More oil is going to quietly come out of the Gulf, they are concerned about rising demand in the third and fourth quarters and don’t want to see the market starved and see prices rise to such a high level that they hurt economic growth.
JPMorgan analysts are also SPECULATING that oil prices will rise, this is what the Bank needs to meet its financial obligations and cover up its bad credit defecit.
The knee-jerk reaction to the OPEC news is probably a little overdone, it does show that there’s dissension among the members. We’re trading more on the political implications of the meeting than any changes in physical oil supply.
OPEC’s failure to reach a decision on targets shows Iran has increased its stature within the group, according to Petromatrix GmbH. Iran has replaced Saudi Arabia as the most influential member.
The 11 members with quotas, all except Iraq, produced 26.22 million barrels a day last month, 1.375 million above their target, according to WorldWatch News estimates.
OPEC has been operating well above their allocation levels for some time, over 1.3 million barrels a day above, even with Libya production off the market, the allocation levels have had little connection to actual production levels for some time.
Oil in New York has traded between $95.02 and $104.60 since May 9..
Futures gained 1.7 percent after Mohammad Aliabadi, the acting Iranian oil minister and OPEC president, said the group will maintain current output for now. A Gulf delegate said yesterday that the Organization of Petroleum Exporting Countries was going to increase quotas.
The market is higher because OPEC failed to raise production ,we seeing the big reaction to the OPEC news because a quota increase was expected.
Crude oil for July delivery rose $1.65 to $100.74 a barrel on the New York Mercantile Exchange, the highest settlement since May 31. Prices are up 40 percent in the past year.
Brent crude oil for July delivery climbed $1.07, or 0.9 percent, to end the session at $117.85 a barrel on the London- based ICE Futures Europe exchange. It was the highest settlement since May 4.
Saudi Arabian Oil Minister Ali Al-Naimi, representing OPEC’s biggest producer, said his country is ready to supply whatever the market needs.
According to WorldWatch, OPEC has sentenced its own fate, as this failure in production targets will cause a further 3% in crude demand.
Saudi Arabia, together with Kuwait, Qatar and the United Arab Emirates, were ready to supply more oil to the market, al- Naimi said. The four nations proposed a 1.5 million-barrel-a-day increase from the current 28.8 million. That would have meant output of 30.3 million barrels a day.
Libya, Angola, Ecuador, Algeria, Iran and Venezuela were opposed to an increase, as these Nations have serious social and economical problems they also have limited spare capacity
More oil is going to quietly come out of the Gulf, they are concerned about rising demand in the third and fourth quarters and don’t want to see the market starved and see prices rise to such a high level that they hurt economic growth.
JPMorgan analysts are also SPECULATING that oil prices will rise, this is what the Bank needs to meet its financial obligations and cover up its bad credit defecit.
The knee-jerk reaction to the OPEC news is probably a little overdone, it does show that there’s dissension among the members. We’re trading more on the political implications of the meeting than any changes in physical oil supply.
OPEC’s failure to reach a decision on targets shows Iran has increased its stature within the group, according to Petromatrix GmbH. Iran has replaced Saudi Arabia as the most influential member.
The 11 members with quotas, all except Iraq, produced 26.22 million barrels a day last month, 1.375 million above their target, according to WorldWatch News estimates.
OPEC has been operating well above their allocation levels for some time, over 1.3 million barrels a day above, even with Libya production off the market, the allocation levels have had little connection to actual production levels for some time.
Oil in New York has traded between $95.02 and $104.60 since May 9..
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