News / Economy

OPEC Talks Break Down, Oil Prices Rise

Nigeria's delegation head and OPEC Chairman Goni Musa (L), Oil Minister of Iran and OPEC President Mohammad Aliabadi (C), and OPEC Secretary General Abdalla Salem el-Badri (R) talk during the OPEC meeting in Vienna, June 8, 2011
Nigeria's delegation head and OPEC Chairman Goni Musa (L), Oil Minister of Iran and OPEC President Mohammad Aliabadi (C), and OPEC Secretary General Abdalla Salem el-Badri (R) talk during the OPEC meeting in Vienna, June 8, 2011

Multimedia

Oil prices climbed above $100 per barrel Wednesday after members of the Organization of Petroleum Exporting Countries (OPEC) failed to reach agreement on production quotas.  Analysts had expected OPEC nations to boost production in a bid to lower oil prices and ease pressure on the global economy.  But as Mil Arcega reports, OPEC countries say speculation, not tight supplies are to blame for rising oil prices.

With crude prices up more than 25 percent since January, financial experts believed an agreement by OPEC's 12 member countries was imminent.

Stephan Schulmeister at the Austrian Institute of Economic Research predicted a 60 percent likelihood that the oil producing cartel would vote to boost production.  "Why? Because the economic news from the United States and European Union became more negative, or pessimistic," he said.


Under pressure from consumer nations to bring down oil prices, Saudi Arabia proposed boosting output by one and a half million barrels per day.

But OPEC Secretary General Abdullah Al-Badri says discussions broke down Wednesday after only five hours. "The reason why we were unable to reach a decision is because everybody has their own data," he said.

The International Energy Agency in Paris says it is disappointed by OPEC's failure to reach consensus.   But some member countries, including Venezuela and Iran, insisted the cartel's output of roughly 26 million barrels per day is more than adequate to meet global demand.  

In the end, AL-Badri says there were simply too many open questions. "Because of the inflation, because of the unemployment, because of the sovereign debts because of the manufacturing decline, so there is a lot of uncertainty, which makes the decision very difficult to take," he said.

Some experts say the break down shows that some OPEC countries are more interested in cashing in on high oil prices than stabilizing energy markets.

Alexander Poegl at JBC Energy says the ongoing turmoil in some Arab countries has only added to the uncertainty. "The Arab Spring is causing increased spending of the individual countries.  This means of course that individual countries have a strained budget which in turn means that countries exporting oil or natural resources are looking to have a high oil price in order to increase revenue," he said.

Some OPEC members warn continuing high oil prices could ultimately backfire on producers -- especially if rising prices prompt consumers to sharply conserve energy or switch to alternative sources of fuel.

You May Like

Video Drug Use Rises in Afghanistan

Ninety percent of world’s heroin comes from Afghanistan More

Here's Your Chance to Live in a Deserted Shopping Mall

About one-third of the 1200 enclosed malls in the US are dead or dying. Here's what's being done with them. More

Video NASA: Big Antarctica Ice Shelf Is Disintegrating

US space agency’s new study indicates Larsen B shelf could break up in just a few years More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Poverty, Ignorance Force Underage Girls Into Marriagei
X
May 21, 2015 4:14 AM
The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.
Video

Video Women to March for Peace Between Koreas

Prominent female activists from around the world plan to march through the demilitarized zone dividing North and South Korea to call for peace between the two neighbors, divided for more than 60 years. The event, taking place May 24, marks the International Women's Day for Peace and Disarmament and has been approved by both Koreas. Zlatica Hoke has more.
Video

Video Drug Use Rises in Afghanistan Following Record High Poppy Crops

Afghanistan has seen record high poppy crops during the last few years - and the result has been an alarming rise in illegal drug use and addiction in the war-torn country. VOA's Ayesha Tanzeem has this report from Kabul.
Video

Video America’s Front Lawn Gets Overhaul

America’s front yard is getting a much-needed overhaul. Almost two kilometers of lawn stretch from the U.S. Capitol to the Washington Monument. But the expanse of grass known as the National Mall has taken a beating over the years. Now workers are in the middle of restoring the lush, green carpet that fronts some of Washington’s best-known sights. VOA’s Steve Baragona took a look.

VOA Blogs

World Currencies

EUR
USD
0.8982
JPY
USD
121.07
GBP
USD
0.6376
CAD
USD
1.2215
INR
USD
63.612

Rates may not be current.