Veinna, March 17: OPEC, which pumps 40 percent of world crude, froze its output ceiling at a meeting here on Wednesday against a backdrop of recovering oil prices and uncertainty over global economic prospects.
In a statement issued after a ministerial meeting in the Austrian capital, the Organization of Petroleum Exporting Countries said it “decided to maintain the current oil production ceiling unchanged.”
Nevertheless, “given the uncertainty in the macroeconomic environment and world oil demand, the secretariat will continue to monitor closely developments in the months ahead,” the statement said.
OPEC, which is marking its 50th anniversary this year, said it would review the economic situation at its next ordinary meeting in Vienna on October 14.
“We have to be very cautious because what we are seeing at this time, it’s not really (economic) growth,” OPEC Secretary General Abdalla Salem El-Badri told reporters at a news conference in the organisation’s brand new headquarters in central Vienna.
“A lot of money is being thrown into the market and the growth (we’re seeing at the moment) is because of the stimulus packages. China is having stimulus packages, the United State, Europe, Japan.
“And everyone is putting money into the economy so they can prevent this recession.”
El-Badri said the main worry for OPEC was how it handles “the exit from those stimulus packages.”
The decision not to alter its output ceiling — which the cartel has now held unchanged for 15 months — had been seen as a done deal.
In recent days, OPEC’s 12 member countries have pointed to high oil inventories, low demand and recovering crude prices for reasons not to move.
The organisation’s president, Ecuadoran Oil Minister Germanico Pinto, said Wednesday that while oil prices had “held up” since the cartel’s last meeting in December, “the strength of the global economic recovery in 2010 remains uncertain and uneven.”
He added in the meeting’s opening address: “The main challenges today concern market stability at a time of much uncertainty in the world economy.
“While there has been an improvement in the oil market outlook in recent months, there is still a long way to go before we can feel at ease with the situation.
“Developments in the world economy, which remains balanced on a knife-edge of uncertainty, will continue to have a direct impact on the outlook in the coming months,” said Pinto.
OPEC has had an official output level, excluding production by Iraq, of 24.84 million barrels a day since January 2009 after removing a massive 4.2 million barrels from the target level in a move aimed at halting a slide in prices.
Oil prices, which tumbled from historic highs of more than 147 dollars in July 2008 to about 32 dollars in December in response to the global recession, have since clawed back ground on economic recovery hopes.
New York crude was trading above 82 dollars ahead of OPEC’s formal announcement.
“Apparently this is a comfortable price for producers and consumers at this time, at this pace of world growth,” El-Badri said on Wednesday.
“If world growth were higher than the one we are seeing, then maybe prices would be different. But at this time, with world growth at 3.4 percent, a range of 70-80 dollars is fine.”
The outlook for prices would now very much depend on the strength of economic recovery, analysts said.
Oil prices rose on Wednesday one day after the Federal Reserve maintained record low interest rates.
Markets are also worried that rising inflation in China may cause the Asian power to cool its overheating economy, in turn dampening energy demand in the world’s second biggest energy consuming nation.
OPEC comprises Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
—Agencies