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Thursday, May 28, 2009

Crude Prices Hit Fresh High as OPEC Holds Output Steady

Kathryn Buschman Vasel

FOXBusiness

Oil prices soared more than a dollar Thursday to strike a six-month high after the Organization of the Petroleum Exporting Countries vowed to hold output steady.

Continued worries about countries racking up massive debt to counter dragging economies also helped push prices to a high of $65.23. Crude prices closed up $1.53 at $64.98.

Government data showed crude inventories declined more than expected last week as refiners increased operations. The Energy Information Administration reported inventories dropped 5.4 million barrels last week. Analysts were expecting a drop of only 700,000 barrels.

Oil prices are now sitting more than two times above December prices.

The EIA report Energy Information Administration report, which came out a day late due to the holiday-shortened week, also showed gasoline inventories dropped for the fifth week.

After its two-day meeting, OPEC decided not increase oil production; hoping demand would soon rise when global economies start to recover.

"Stay the course, this is the decision," Saudi Oil Minister Ali al-Naimi told reporters after the meeting, according to Reuters. "The price is good, the market is in good shape, recovery is under way. What else could we want?"

The 12-member will assess production levels at its next meeting scheduled for September.