OPEC said Wednesday it will not put more oil on the global market despite record-high prices for crude, blaming the U.S. for economic "mismanagement" that...
VIENNA, Austria — OPEC said Wednesday it will not put more oil on the global market despite record-high prices for crude, blaming the U.S. for economic “mismanagement” that it said was having a worldwide effect.
Oil soared past $104 for the first time after the OPEC announcement and the release of a government report showing a surprise drop in crude-oil stockpiles.
Light, sweet crude for April delivery jumped $5 to settle at a record $104.52 a barrel on the New York Mercantile Exchange after earlier rising to $104.64, a new trading record.
Earlier this week, oil prices broke the previous inflation-adjusted price record of $103.76, set in 1980 during the Iran hostage crisis.
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The 13-nation Organization of Petroleum Exporting Countries (OPEC) said it would maintain current production levels because crude supplies are plentiful and demand is expected to weaken in the second quarter.
OPEC President Chakib Khelil told reporters the global market is being affected by what he called “the mismanagement of the U.S. economy,” and that America’s problems were a key factor in the cartel’s decision to hold off on any action.
“If the prices are high, definitely they are not due to a lack of crude. They are due to what’s happening in the U.S.,” Khelil said. “There is sufficient supply. There’s plenty of oil there.”
Khelil’s comments came a day after President Bush lashed out at the organization for allowing high prices.
“In truth, OPEC’s decision not to pump more oil is a reflection that supply is relatively good,” said Anthony Sabino, a professor of business at St. John’s University in New York.
“What is driving oil prices up to the stratospheric level of over $100 per barrel is the U.S. economy, now undeniably in recession,” he said. “It’s not so much the price of oil is going up — it’s that the value of the U.S. dollar, sad to say, is slumping.”