The Organization of the Petroleum Exporting Countries rejected an appeal from Washington for more oil to lower fuel bills and bolster its slowing economy.
Powerful Saudi Oil Minister Ali al-Naimi said he would have pushed for an output increase if it were needed but that global supply and demand were in balance.
“The condition of the market is sound currently, supply and demand are equal and global reserves are fine,” Naimi said.
“No surprise with this decision,” said analyst Simon Wardell at Global Insight.
“I think the instinct is to cut, but with a meeting next month they were always likely to wait until then to make the cut they believe is needed. They want to balance consumer concerns over the global economy with their own desire to support prices and ensure government revenues continue to accumulate.”
Leading price hawks Venezuela and Iran already are suggesting OPEC may need to consider output curbs at the group’s March 5 meeting to put a floor under prices.
Delegates say
That could mean a tussle between those keen to defend prices and others concerned that supply curbs could accelerate an economic downturn.
“We don’t want to be pumping more barrels into an economy that tanks but equally we don’t want to be cutting and precipitating a recession either,” said one senior OPEC delegate.
Saudi’s Naimi said Riyadh now was pumping at 9.2 million barrels daily, well in excess of its OPEC allocation of 8.94 million bpd.
Traders say that would suggest he is making a discreet effort to ease prices — normally at this time of year Saudi would be reducing output ahead of a seasonal second quarter drop in demand.
During a 6-year oil price rally OPEC has often said it was powerless to influence prices, usually blaming speculators for a bull run that took crude over $100 a barrel in early January.
Driven by rising Chinese demand and with global growth of some 5 percent, the world economy proved able to cope with inflated fuel prices.
As growth slows, oil markets will be watching closely to see how far OPEC goes with supply curbs to prop up prices.
Many in the 13-member organisation take the view that oil plays no part in a downturn led by the U.S housing market crisis and the resulting credit crunch.
