VIENNA – OPEC unexpectedly left its production levels unchanged Wednesday, causing oil prices to jump, as senior officials said their meeting ended in disarray — a stunning admission for an organization that places a premium on consensus decision making.
OPEC officials said that because of a policy deadlock, the group will maintain present output ceilings with the option of meeting within the next three months to consider a hike.
“We are unable to reach consensus to ... raise our production,” OPEC Secretary General Abdullah Al-Badri told reporters, in comments reflecting unusual tensions in the 12-nation Organization of the Petroleum Exporting Countries.
Saudi oil minister Ali Naimi called it “one of the worst meetings, we’ve ever had,” while analysts covering OPEC for more than 20 years said they could not remember any other time that the normally closed group had admitted to such divisions in its ranks.
Some even saw the abortive meeting as a harbinger of demise for the organization, which produces more than a third of the world’s petroleum.
“OPEC is ... on the point of break-up,” said Marc Ostwald of Monument Securities. “A broader perspective is that the post World War II world order is fracturing in a spectacular fashion, be it the EU/Eurozone, the World Bank/IMF, (or) OPEC.”
Other experts were less outspoken but agreed Wednesday’s outcome would weaken the image of OPEC as a major regulator of oil markets.
“I think there were some tensions,” said Jason Schenker, president of Prestige Economics. “But everyone has to do business and countries have different views on what the future of demand looks like.”
The news caught markets by surprise, sending oil prices sharply higher. Benchmark crude for July delivery was up $1.25 to $100.34 per barrel in morning trading on the New York Mercantile Exchange after trading lower ahead of the OPEC meeting.