Oil closed at a record high over $78 today after an OPEC deal to ramp up production failed to calm concerns about thinning world inventories.
The producer group, which supplies more than a third of the world's oil, struck a deal to add 500,000 barrels per day (bpd) starting November 1st to markets concerned about a potential shortfall in the fourth quarter.
"It looks like it's going to apply some upward pressure to (crude prices) again because earlier this morning there were some rumors that they would increase it to 700,000 bpd to 1 million bpd," said Jim Ritterbusch, president of Ritterbusch & Associates. "This 500,000 bpd appears to be a token gesture."
US light crude settled 74 cents higher at $78.23, the highest close ever and near the all-time intraday high of $78.77 hit on August 1st. London Brent crude gained 90 cents to trade at $76.38.
OPEC officials said the agreement would add oil to current production levels, which are around 1 million bpd over their current 25.8 million bpd quota ceiling.