OPEC’s oily mess

For the first time in nearly 20 years, OPEC’s squabbling over profits dashed hopes of boosting oil output, pushing crude past $100 a barrel here and heightening fears of runaway prices at the pump.

Discussions among the big oil producers, including Saudi Arabia, Venezuela, Iraq and Iran, collapsed yesterday in what Saudi Oil Minister Ali al-Naimi called “one of the worst meetings ever.”

This is the first OPEC meeting since the beginning of the “Arab Spring,” the pro-democracy movements roiling governments in North Africa and the Middle East.

The initial protests earlier this year were the major cause for sending crude prices north of the $100 a barrel mark for the first time since late 2008.

Al-Naimi blamed it on Saudi Arabia’s inability to convince all 11 ministers to hike supplies and give the world a break from high prices.

Investors believe OPEC’s discord could quickly push oil to $130 a barrel in 2011, according to JPMorgan Chase analyst Lawrence Eagles.

Oil is up 10 percent this year, which boosts OPEC profits but could hamper the global economic recovery and ignite inflation.

“Oil prices rising over $120 per barrel will have a severe impact on the world economy,” said oil analyst Thorbjorn Bak Jensen at A/S Global Risk Management.

Gas at the pump has dropped 18.4 cents a gallon in the past four weeks to an average $3.78 a gallon, down from $3.97.

But pump prices are still 39 percent higher than a year ago and are likely to climb again from crude’s run-up and more demand from summer driving, analysts said.

In New York, crude rose 1.7 percent to $100.74 a barrel, up $1.65.

Saudi Arabia’s oil minister said his kingdom, the world’s biggest oil exporter, would break from OPEC’s standoff and supply crude as needed.

Meanwhile, Exxon announced its biggest oil discovery in 12 years in the Gulf of Mexico, which produces 30 percent of US crude needs. The new find, capable of adding 700 million barrels of light crude to the energy pipeline, extends as deep as 4.4 miles under sea level.

Its oil wouldn’t reach US markets this summer, but refiners already have shipped extra gas for summer demand. Wholesale gas fell 1.32 cents a gallon yesterday to $2.9787.