Opec defers production cut

Oil prices rise as cartel announces output squeeze from February.

    The Opec decision was confirmed by the oil ministers at a meeting in the Nigerian capital Abuja on Thursday
    Light sweet crude for January delivery rose $1.11 to $62.48 a barrel on the New York Mercantile Exchange. Brent crude for January, which expires at the close of trading on Thursday, was up 90 cents at $62.23 a barrel.
     
    The bump in oil, pushed up several large energy companies' stock prices. Shares of Exxon Mobil Corp. gained 93 cents to $78.29 on the New York Stock Exchange, where shares of Royal Dutch Shell rose 41 cents to $71.29.
     
    Meanwhile, shares of fuel-dependent airlines fell, though the drop may partly reflect profit taking after a steady run up that followed excitement about industry consolidation. Shares of American Airlines parent AMR fell $1.28 to $31.37 on the NYSE, while those of JetBlue Airways slid 36 cents to $13.79.
     
    The decision by the Organisation of Petroleum Exporting Countries was confirmed by Edmund Daukoru, the Nigerian president and oil minister, along with ministers from other member nations who met in the Nigerian capital, Abuja.
     
    With world inventories high but moving downward and the coldest days of the northern hemisphere winter still ahead, the move was intended to come across as a compromise - meant to keep markets and consumers calm at least in the short term.
     
    It also left a possible window for the organisation to decide against a cut in February should demand spike, moving prices sharply upward.
     
    The disagreement within Opec over whether further reductions in output were needed reflected uncertainty over demand, worries that inventories are too high and chafing over the shrinking US dollar that makes each barrel of crude worth less to Opec members because the currency decline reduces their purchasing power in Europe.
     
    On Wednesday, the US energy department released data showing a 4.3 million barrel drop in US crude oil inventories last week, while the International Energy Agency said in its monthly report that stockpiles of crude in industrialised nations fell by 40 million barrels in October - evidence that global inventories are tightening.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    How different voting systems work around the world

    How different voting systems work around the world

    Nearly two billion voters in 52 countries around the world will head to the polls this year to elect their leaders.

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    The great plunder: Nepal's stolen treasures

    The great plunder: Nepal's stolen treasures

    How the art world's hunger for ancient artefacts is destroying a centuries-old culture. A journey across the Himalayas.