Oil prices have been the talk of the town these days.
And that talk is heating up even more with news from OPEC.
Today’s OPEC meeting, for the first time in 20 years, failed to reach an agreement.
The president of OPEC, Iran’s Mohammad Aliabadi, said for the moment OPEC’s oil output will remain stationary.
Saudi Arabia proposed increasing quotas to 1.5 million barrels a day, and this was backed by Kuwait, Qatar, and the United Arab Emirates.
But discussions came to a stalemate when this proposition was strongly opposed by 6 of OPEC’s 12 countries: Libya, Angola, Ecuador, Algeria, Iran, and Venezuela.
Saudi Arabia wanted to add to the 28.8 million barrels a day that are already being supplied.
The country’s representative Ali Al-Naimi said that Saudi Arabia still wants to supply whatever it can to the demanding market despite the rest of OPEC’s failure to do so.
One of the main problems that most likely arose against the proposition to increase output is the current condition of Libya.
Libyan oil output is down almost 90% since the rebellions began to remove the country’s leader, and this has required other countries to increase their output.
What’s more, Kuwait, Qatar, and the United Arab Emirates support the Libyan rebels, which has certainly caused disagreements among countries within OPEC.
The cherry on top is the animosity between Saudi Arabia and Iran, which is made even worse by Iran’s status at the top of OPEC.
Even Kuwait and the United Arab Emirates would have difficulty increasing their supply, as they are already extremely close to their full output capability.
The outcome of OPEC’s meeting in Vienna, Austria today has caused an instantaneous rise in crude oil prices for the first time in weeks.
Crude oil for July delivery rose 2.6% on the New York Mercantile Exchange to $101.68 a barrel.
Representative Edward Markey told Reuters he thinks this is an indication that America should work toward breaking off its dependence on OPEC oil.
Todd Horwitz of Adam Mesh Trading Group in New York looked at a slightly brighter side, telling Bloomberg that it would take a “crisis” to break the $95-$105-a-barrel range that oil has been trading in since May.
Fortunately, he said, this does not count as a “crisis”.
It is a little disheartening to see this sort of a disagreement as oil prices continue to rise.
But at least OPEC’s output hasn’t dropped.
That’s all for now,