NEW YORK - With their economies slowed by high energy costs, the United States and other countries were hoping that OPEC at its meeting this week would raise production levels to bring down the price of oil.
The Organization of Petroleum Exporting Countries did not come to the rescue.
In a contentious meeting in Vienna, Austria, on Wednesday, the 12-nation group failed to agree on new production targets. That sets the stage for higher prices for oil and gasoline later this year as global demand for oil rises faster than supplies.
Saudi Arabia lobbied for an increase in output, which likely would have lowered oil prices. But OPEC members such as Iran resisted, arguing that oil supplies are adequate to meet demand and current prices are appropriate.
"We are unable to reach consensus," OPEC Secretary-General Abdullah al-Badri told reporters after the meeting. Saudi oil minister Ali Naimi called the meeting "one of the worst ever."
Traders were surprised and oil prices climbed. Benchmark West Texas Intermediate for July delivery gained $1.65 to settle at $100.74 per barrel on the New York Mercantile Exchange. Oil prices jumped 25 percent from January through April as global demand grew to the highest level on record
Many analysts believed OPEC would increase production. It not only supplies 34 percent of the world's oil - about 29.7 million barrels per day - it also has the unique ability to crank up production as needed. Other oil-producing countries, such as Canada, Russia, and Mexico, don't have that flexibility.