SINGAPORE – Oil rose in Asian trade Thursday after an OPEC meeting broke up without agreement on raising production quotas, despite calls for a boost to aid a faltering global economy, analysts said.
New York’s main contract, light sweet crude for July delivery, gained 41 cents to $101.15 a barrel and Brent North Sea crude for July delivery rose five cents to $117.90 in the afternoon.
“Crude is rallying because of OPEC discord, failing to reach an agreement on higher output levels,” Victor Shum, a Singapore-based analyst at Purvin and Gertz international energy consultancy, told Agence France-Presse.
The Vienna meeting on Wednesday ended with the 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,” OPEC Secretary General Abdullah El-Badri said after the meeting.
Traders had earlier speculated that the 12-nation Organisation of the Petroleum Exporting Countries would boost 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.
Coupled with the continued unrest in the oil-producing Middle East and North African region, analysts expected oil demand to rise in the next few months.
“In the long term, the oil market is fundamentally bullish with demand growth going forward, and so the OPEC group is going to have to supply more output,” Shum said.
“Supply-side worries including conflict in Libya also are supporters of oil demand growth expected in the remainder of the year,” he added.