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| Opec ministers say they could move before March
to reduce output |
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.
(BBC) | 
Updated: 2005-01-31 08:58