NEW YORK (TheStreet) -- Crude oil futures settled above $101 Thursday after a dramatic stalemate over production quotas among top oil ministers.
The draw in crude oil inventories by 4.8 million barrels reported for the week ended June 3 also continued to provide bullish support for oil.
Light sweet crude oil for July delivery rose $1.19 to settle at $101.93, while the July Brent crude contract increased $1.67 to $119.52.
Key oil-exporting countries, including price hawks Iran and Venezuela, stood against Saudi Arabia during the Organization of Petroleum Exporting Countries' meeting Wednesday in Vienna, Austria. The impasse brought the meeting to an abrupt conclusion without a decision on output quotas being agreed upon.For the first time in at least two decades, the oil cartel could not reach a decision on oil production targets. OPEC produces about 40% of the world's crude oil supplies. JBC Energy Research Center analysts say it appeared the 12 members of OPEC were split 50-50. Those against an increase, the analysts said, noted that demand still appears lackluster, with refiners hesitant to buy in a volatile high price environment. "This is the logic behind why OPEC may meet again, if deemed necessary, in three months time when the expected demand becomes more concrete." Kate Warne, U.S. Investment Strategist at Edward Jones, calls OPEC's failure to reach an agreement a "disappointment," but wouldn't be surprised if some OPEC constituents raised output partly because an agreement wasn't reached. The U.S. Energy Information Administration this week revised its oil projections. It now expects worldwide demand to increase by 1.7 million barrels a day this year, thanks to stronger demand from China, Japan and the Middle East for power generation. "The decisions China makes are going to drive prices everywhere," says Warne. Suncor Energy (SU) rose 0.4% to $39.96, BP (BP) gained 1.8% at $44.25, Total S.A. (TOT) added 1.1% at $56.09, Hess (HES) rose 2.2% to $75.39, China Petroleum & Chemical (SNP) was ahead by 1.1% to $97.43, Exxon (XOM) was higher by 0.6% at $81.27 and ConocoPhillips (COP) was up 1.5% at $72.52. -- Written by Andrea Tse in New York.
>To contact the writer of this article, click here: Andrea Tse.
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