Bond Prices Edge Higher After OPEC Has Trouble Reaching Production Pact
NEW YORK -- Bond prices edged higher yesterday after the Organization of Petroleum Exporting Countries apparently hit a snag in its latest efforts to cut production and drive up oil prices.</br></br>Some long-term Treasury bonds rose about one-quarter of a point, or $2.50 for each $1,000 face amount. However, interest rates on short-term Treasury bills rose slightly, reflecting the continued high level of the federal funds rate.</br></br>Investors have been focusing intently on oil price developments. Yesterday, oil prices slumped as OPEC members unexpectedly postponed a scheduled meeting in Geneva until today.</br></br>"Oil is a symbol of inflation in the minds of many people," said A. Gary Shilling, president of an economic forecasting and investment strategy firm bearing his name. "I think it's overdone, but the markets sure have gotten the jitters lately" as oil producers appeared to be nearing an accord to cut production, he said.</br></br>Inflation will rise only moderately next year, according to many analysts. Even if oil producers succeed in cutting production this winter, they won't be able to prop up oil prices next spring, some forecasters contend.