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Vienna: Opec agreed yesterday to keep oil output restraints in place, balancing rapidly declining oil stocks in consumer nations against the risk recent selling in share markets could herald an economic downturn.
Ministers confirmed the widely expected decision after talks lasting little more than three hours.
Opec, which pumps over a third of the world's oil, had agreed cuts totalling 1.7 million barrels per day, or six per cent of supplies, at its previous two meetings. The emphasis now was on ensuring those reductions were implemented in full.
"I am very, very content," Nigerian Minister of Energy Edmund Daukoru said of the outcome.
"Our commitment is to keep the market supplied. To oversupply and create imbalance would make no sense at all."
Ministers were concerned that two waves of selling on global equity markets this year could presage a bigger sell-off that would hurt economic growth and oil demand.
Opec President and UAE Energy Minister Mohammad bin Dha'en Al Hamili may convene another meeting in June, three months before the next scheduled meeting, if necessary.
Stocks wobbled this week on concerns over the impact of US home owners falling behind with mortgage payments. Equities and oil rose on Thursday, with U.S. crude up 10 cents at $58.26.
"We are watching developments on world stock markets, to assess their possible impact on the global economy and, in particular, on energy demand," Al Hamli said.
"I think compliance has been very good and also the ministers have given complete assurance that there will be continued commitment," Al Attiyah said. He said for now, Opec has agreed to meet again on September 11 in Vienna and the group accepted UAE's invitation to hold extraordinary meeting on December 5 in Abu Dhabi.
Among those who reportedly backed keeping output steady - though possibly ending overproduction above agreed levels - is Saudi Arabia's oil minister, Ali Naimi.
"We remain concerned about the continuing weakness of the US dollar against other major currencies, notably the euro and the pound sterling, because this is having a significant effect on the purchasing power of oil-producing developing countries."
MARKET
US crude rises but Brent futures fall
Oil prices held above $58 per barrel yesterday, after Opec ministers said they would maintain crude production at existing levels.
Light, sweet crude for April delivery added 14 cents to $58.30 a barrel in early trading on the New York Mercantile Exchange. April Brent crude on the ICE Futures exchange in London slipped 18 cents to $60.88 a barrel.
Natural gas prices fell 5.1 cents to $7.032 per 1,000 cubic feet. In other Nymex trading, heating oil futures dipped less than a penny to $1.702 a gallon, and gasoline futures dropped nearly 3 cents to $1.9005 per gallon.
- AP
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