U.S. crude prices rose to a record above $104 today after OPEC held oil production steady at a meeting in Vienna and U.S. fuel inventories declined for the first time in eight weeks.
On Wednesday the Organization of Petroleum Exporting Countries announced that it will not increase or reduce oil production. Its resolution considered that crude supplies are plentiful and demand is expected to weaken in the second quarter.
OPECÂ´s decision goes against previous calls from U.S. President George Bush to the members of the organization to boost production in order to help stabilize crude prices. The members of OPEC provide 40 percent of the total crude oil production in the world.
What's happening in the oil market is due to the mismanagement of the U.S. economy, which is probably affecting the rest of the world, said OPEC President Chakib Khelil, according to Reuters.
Crude oil for delivery in April rose $5.11, or 5.13 percent, to $104.63a barrel on the New York Mercantile Exchange at 5:08 p.m. on Wednesday. Futures climbed to their highest levels in day trading price since 1983 at $104.95 a barrel. Prices are 74 percent up from a year ago, Bloomberg noted.
Brent crude futures rose $5.00, or 5.02 percent to $104.52 a barrel on London's ICE Futures Exchange. On Monday Brent crude futures reached a new record of $102.29 a barrel.
Supporting prices today, the U.S. Energy Information Department reported U.S. crude inventories fell by 3.1 million barrels on the last week of February. Analysts expected inventories to rise. This is the first drop of stockpiles in eight weeks.
Furthermore, tensions in South America are raising concerns about crude supplies as Venezuela (a member of OPEC) ordered tanks , air and sea forces to be stationed at its border with Colombia on Sunday. A day earlier, Colombia attacked a guerrilla camp in just inside Ecuador, another member of OPEC.