Brent crude jumps to $118 on OPEC decision

Oil rose in the Asian trade today after OPEC failed to agree to raise output to aid a faltering global economy, analysts said.

New York’s main contract, light sweet crude for July delivery, gained 49 cents to $101.23 a barrel and Brent North Sea crude for July delivery rose 27 cents to $118.12.

“Crude is rallying because of OPEC at discord, failing to reach an agreement on higher output levels,” Mr Victor Shum, a Singapore-based analyst at Purvin and Gertz international energy consultancy, said.

The Vienna meeting yesterday broke up without agreement, keeping its official output target at 24.84 million barrels per day (mbpd), where it has stood since January 2009.

“Unfortunately, we are unable to reach a consensus this time to reduce or raise our production,” the OPEC Secretary General, Abdullah El-Badri, said after the meeting.

Traders had earlier speculated that the 12-nation Organization of the Petroleum Exporting Countries (OPEC) would boost the production quotas to cool oil prices.

The International Energy Agency said it was “disappointed” by OPEC’s decision and urged producers to pump more anyway to avoid higher oil prices.

The next OPEC meeting will be in mid-December in Vienna to reassess the oil market situation, said Iran’s caretaker oil minister Mohammad Aliabadi, whose country holds the rotating OPEC presidency.

Some OPEC members are worried that the oil market will tighten in the coming months — as seasonal demand hits a peak in the northern hemisphere summer — pushing oil prices even higher.

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