OPEC inaction sets oil up for further spikes

LONDON (Reuters) – OPEC’s decision not to pump more oil when prices are at record peaks almost daily could leave the oil market vulnerable to further price spikes.

U.S. oil hit a new record of $105.97 a barrel on Thursday, a day after members of the Organization of the Petroleum Exporting Countries (OPEC) left their output policy unchanged, ignoring demands from consumers led by the United States for more oil.


OPEC’s decision, although widely anticipated, came on a day U.S government data showed crude stocks unexpectedly fell last week in the world’s biggest oil consumer, after rising for several weeks in a row.

“Prices rallied in the last few weeks while U.S. inventories built. So what happens to prices when broader crude oil fundamentals actually tighten up a bit? We think there is further upside price risk from that angle,” said UBS economist Jan Stuart.

Reuters