Oil prices soar as optimism wanes

Oil prices shot above $34 a barrel on Tuesday as bickering among oil producers fed concerns that the Organization of Petroleum Exporting Countries will not be able to come to a quick agreement on increasing production when it meets later this month. Crude oil trading on the New York Mercantile Exchange today, jumped $1.95 a barrel to close at $34.19, the highest price since November 1990, three months after Iraq invaded Kuwait to trigger the Gulf War. The price rise coincided with a fresh round of oil diplomacy among OPEC producers divided on the timing of any increase in supply and fearful the wrong move could trigger a price collapse. The 11 nation organization is scheduled to meet on March 27 in Vienna where Iran, Libya and Algeria — among others — are expected to argue to maintain current quotas, while Saudi Arabia and Kuwait argue for production increases. The United States and other countries, concerned by the depletion of global oil inventories, have aggressively urged OPEC producers as well as other large oil exporters like Mexico, to significantly boost exports. Currently, about 2 million more barrels of oil are consumed each day than are produced, and the shortages are showing up in huge price increases at U.S. gas stations.