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Oil Up on OPEC Announcement; Exxon Has Big Discovery

KAREN BLEIER/AFP/Getty Images(NEW YORK) -- Oil settled at $100.74 in New York trading Wednesday, up $1.65 after OPEC declined to boost oil production.  In the apparently acrimonious meeting Wednesday, representatives of Iran and Saudi Arabia took opposing sides, with the Saudis failing in their effort to increase production.
The disagreement among members means that the so-called GCC countries, which include Saudi Arabia, Bahrain and Kuwait, can decide to boost production without OPEC’s approval.
Oil prices have been reacting to events in the Middle East and North Africa in recent months, though the price of oil is still well below the recent high of $113.93 reached in April.
Meanwhile, Exxon announced the discovery of 700 million barrels of oil from a deepwater well in the Gulf of Mexico.  The company called it one of the largest discoveries in the gulf in the last decade.
This is certainly the largest discovery of oil since the BP oil spill and the subsequent moratorium on deepwater drilling that was lifted late last year.
This oil will not have any impact on oil markets until the oil is produced, and even then 700 million barrels is not a huge amount compared to global oil consumption of 18.8 million barrels per day.  The discovery will, however, embolden advocates of deepwater drilling who point to the Gulf of Mexico as a local and stable source of energy to meet U.S. demand.

Copyright 2011 ABC News Radio

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