US
UK
Chinese
Japanese
Hong Kong
Australia
Spanish
Deutsch
Portuguese
Korean
French
RussianThe Organization of Petroleum Exporting Countries, Opec, failed to strike a deal to raise production following what is being discribed as a highly charged meeting.
Going into the meeting, expectations were that Saudi Arabia would push for an increase in the production instead of simply raising its targets to formalize current levels of production. It failed to convince other members to lift production.
There is growing fear of supply shortages later this year and that higher prices could damage global economic recovery. With global demand still strong amidst strong growth in the emerging markets, demand will remain robust, and this decision by OPEC can keep upward pressure on prices.
"It was decided we have about three months to evaluate the situation and then we will make the appropriate decision," said Mohammad Aliabadi, Opec president. "It's a rollover."
Follow us
"We were unable to reach an agreement - this is one of the worst meetings we have ever had," Saudi oil minister Ali al-Naimi said.
The news sent oil higher, breaching the $100 level, and holding those levels but it eased back a bit after the initial $1.50 jump. Higher oil prices hurt the USD against the CAD, and some other higher yielders, reversing some of the flows we had seen towards USD strength as a dominant theme overnight was risk aversion amidst lower equities.
OPEC" rel="lightbox[41370]" href="http://www.fxtimes.com/wp-content/uploads/2011/06/060811-usd-cad-post-OPEC.png">
The USD/CAD slid quite sharply from the 0.9820 area, an important resistance level over the past few weeks. In the hour after the release, is was trading near 0.9770, having hit as a low as 0.9760 and paring most about 1/2 of its decline from overnight.
Nick Nasad
Chief Market Analyst
FXTimes
