OPEC left unchanged its oil production ceiling today, snubbing US demands for an increase as the cartel focuses on supporting prices which have fallen 10% since the start of the year.
'We all agreed to keep things as they are,' Nigeria's Minister of State for Energy, Odein Ajumogobia, said after the conclusion of OPEC's meeting in Vienna.
Saudi Arabia, the oil cartel's most influential member and the world's biggest producer of crude, said before the meeting that it saw no need to change official output of the Organisation of Petroleum Exporting Countries.
'Had there been a need to take any measures concerning supply and demand, we would have taken them. But the current situation shows that the market fundamentals are sound,' Saudi Arabian Oil Minister Ali al-Nuaimi told the pan-Arab daily Al-Hayat in an interview published today.
OPEC, which pumps 40% of world oil, decided to keep official daily output at 29.67 million oil barrels. The freeze is a snub to the US after President George W Bush recently urged OPEC to increase output to help bring down high oil prices that stunt economic growth and fuel inflation.
However, lower oil prices are not welcomed by crude producers as their export income drops. Since striking a high above $100 a barrel at the start of the year, the price of oil has slid owing to fears of a US recession and a global economic slowdown. But crude futures are still almost double the level of a year ago.
A US recession would dent demand for crude in the world's biggest energy market and send oil prices sliding further, OPEC fears.
New York's main oil futures contract, light sweet crude for delivery in March, slumped $1.98 to $89.86 a barrel after OPEC's output decision. Brent crude was down $1.70 to $90.51.
OPEC's meeting today was an EGM that was scheduled at the group's last official gathering on December 5 in Abu Dhabi.
OPEC had decided in December against increasing production, insisting that the market was well supplied and that high prices were caused by speculative activity, not a reaction to the demand and supply situation. The next OPEC meeting is due next month in Vienna.
