VIENNA, Austria – OPEC members have informally agreed to leave intact their official target for crude oil output until they meet again in June to reassess market conditions, several representatives of the group said Friday.
Delegates of the Organization of Petroleum Exporting Countries have reached a consensus against changing their production for the next three months, and they later met in a formal session at OPEC's headquarters in Vienna to formalize the decision.
With crude prices having risen this week to within OPEC's desired range, or band, of $22-28 a barrel, Saudi Arabian Oil Minister Ali Naimi said the information he had about the supply and demand for crude made it clear that OPEC should stick with its current output policy.
"What I have today says the market is stable, inventories are on the high side (and) the price is within the band. We don't need to do anything," he told reporters before the start of the formal meeting.
OPEC was "very comfortable" and "relaxed," he said. "Now, what will happen in June? I have no idea until I see the data."
His Iranian counterpart, Bijan Namdar Zangeneh, said OPEC would "probably" decide to increase output at its next meeting in mid-June. "We don't want to make an artificial shortage," he said.
OPEC's decision against adjusting production was widely expected and came amid continued uncertainty about whether a global economic recovery — and a rising demand for oil — is gaining momentum.
Despite signs that the U.S. economy is rebounding from its slump, OPEC is fearful of undermining its own success in shoring up weak prices by adding more oil to world supplies at this time. OPEC's 11 members supply about a third of the world's crude.
The group cut its official production by 1.5 million barrels a day in January. Its daily output target is now 21.7 million barrels.
Although demand for oil tends to rise during the second half of the year, the big question for OPEC in June will be whether the world's economy is robust enough to justify an increase in crude supplies.
Libyan Oil Minister Abdulhafid Mahmoud Zlitni, said it was too early to predict.
"All the facts and figures indicate that the market is now getting stabilized. There are signs of good improvement in growth rates throughout the world, but they're not sustainable yet," he said.
OPEC has slashed 5 million barrels from its daily output target since October 2000 in an effort to prop up weak prices.
Recent signs of a rebounding economy in the United States, which consumes one out of every four barrels of oil produced, have helped since then to firm up prices. So too has speculative buying of futures contracts on concerns that a U.S.-led attack might knock OPEC member Iraq out of the export market.
May contracts of North Sea Brent crude slipped 20 cents to $24.47 a barrel in afternoon trading Friday on the International Petroleum Exchange in London. Contracts of U.S. light, sweet crude for April delivery fell 4 cents to $24.52 Friday on the New York Mercantile Exchange.
OPEC's benchmark price for a blend of seven different crudes rose 42 cents to $22.79 a barrel on Thursday, the most recent day for which the group compiled information.
The OPEC benchmark price had languished since late September at well below the group's desired minimum price of $22 a barrel, until breaking through that psychologically important threshold on Monday.
Ministers and energy analysts alike have said that much of the recent rise in prices is due to psychological factors. World oil markets have been particularly jumpy about possible U.S. military action against Iraq and the effects such a conflict might have on other oil exporters in the Persian Gulf region.
Falah Aljibury, a California-based energy consultant, said uncertainty about exports from OPEC member Venezuela has added to these concerns. A two-week-old employee dispute has flared into the worst crisis for Venezuela's state-run oil monopoly since the company was created in 1975.
Together with tensions in the Mideast and bets by many traders of oil futures that demand will recover, the Venezuelan dispute has added $3 to the price for a barrel of oil, Aljibury said.
Nonetheless, most observers foresee a need for more crude later in the year if seasonal demand perks up as expected. Demand for gasoline usually grows during the peak summer driving season in the United States and Europe, while demand for heating oil increases during the fall and winter.