Opec to Keep Oil Output Unchanged
Opec producers meeting in Vienna have agreed to keep oil output levels unchanged at 27 million barrels a day.
Crude prices are up about 40% on last year but Opec ministers do not believe the world economy is being held back.
Production was raised in 2004 after prices hit record levels amid supply disruptions and soaring demand from the US and China.
The quota-busting, however, was blamed by members for a subsequent retreat in crude prices.
In December, Opec cut production by 1 million barrels a day to bring output closer to its target level.
In recent years Opec, which accounts for about 40% of world oil production, has been trying to ensure market stability.
Its members appear now to be prepared to defend higher oil prices.
At Sunday's meeting the 11-member group agreed to suspend its target price band of $22 to $28 a barrel - a level set in 2000.
"We have to wait until the second quarter of this year to know exactly where the price indicator will head," said Opec president and Kuwaiti Energy Minister, Sheikh Ahmad Fahd al-Sabah.
In New York on Friday, a barrel of light crude fell $1.66 to $47.18, while in London, Brent crude was down $1.49 at $44.95.
Several Opec ministers have indicated that oil prices were too high to justify production cuts, despite concerns over a possible build in supplies during the seasonally weak second quarter of the year.
But Opec said consultations may take place before the group's next meeting in March to coordinate a cut if needed.
"We think the high price will not effect the global economy," said Sheikh Ahmad.
Analysts say the weakening of the US dollar has protected non-dollar importers from the rise in dollar-denominated oil prices.
"Oil prices are high but the US economy hasn't skipped a beat and the weaker dollar has insulated many growing economies from a shock," said Yasser Elguindi at Medley Global Advisers.
(Chinadaily Jan. 2005)