Oil cartel to keep production steady
The OPEC ministers decided, though, to hold a meeting in February to reassess if prices soar.
ABU DHABI, United Arab Emirates - OPEC hedged its bets yesterday by opting to keep its daily oil production steady, but setting a meeting for Feb. 1 to raise output if prices skyrocket.
Benchmark crude prices rose on word of the decision, but the prospect of a review early next year - and its potential to raise production ceilings if warranted - checked the upward trend.
After spiking about $2 on news that present levels would be maintained, light, sweet crude for January delivery reversed course and settled down 83 cents at $87.49 on the New York Mercantile Exchange.
That was more than 10 percent off the record of almost $100 a barrel set last month, suggesting the decision by the Organization of Petroleum Exporting Countries would not roil markets - at least for now.
A final communique from the OPEC oil ministers' meeting in Abu Dhabi said the group would leave output unchanged "for the time being," because the world was "well-supplied" and crude reserves were at comfortable levels.
"We have enough stocks in the market," OPEC Secretary-General Abdalla Salem el-Badri said. "There is no reason for prices to go [to] $100 a barrel," he added.
Still, the statement expressed concern about market volatility driven by speculation - and suggested OPEC was ready to step in if needed by taking "every measure deemed necessary to keep market stability through the maintenance of supply and demand in balance."
Yesterday's decision by oil ministers of the 13-nation group seemed to suggest that OPEC now viewed prices near or above $90 - an increase of about $40 since the start of the year - as acceptable.
The United States and other energy-hungry nations had been hoping for a decision to raise oil output at least 500,000 barrels a day.
Total OPEC output is estimated at about 31.5 million barrels a day. That is about 40 percent of daily world demand, which is estimated at about 85.5 million barrels. The 10 OPEC members that fall under quotas are pumping more than 27 million barrels a day.
"While the lack of a formal output increase by the OPEC 10 may do little to calm current market anxiety, the [International Energy Agency] recognizes that total OPEC output has been much higher," he said from Paris. "And there are signs that more OPEC oil may be on its way in December."
Forecasts of reduced demand growth from both OPEC and the IEA have pushed prices down recently, along with the extra oil reaching markets from the last OPEC production increase.