Organization of the Petroleum Exporting Countries said Wednesday that it was leaving its production levels unchanged for the moment, signaling that it was more concerned with slowing economic growth than with high oil prices.
The oil cartel rejected calls from oil consumers, including the United States, to increase output to drive down prices. Saudi Arabia had initially said the group would consider increasing production by 500,000 barrels a day but backed down in the face of opposition from other members after oil prices fell last week.
With oil prices still nearly $90 a barrel, Wednesday's decision suggests that producers have significantly increased their minimal target price for oil. Analysts now believe that OPEC's new floor to be around $70 to $80 a barrel.
Given the volatility in oil markets, the Organization of the Petroleum Exporting Countries said it would meet again in February to review its decision and fine-tune its supply levels.
Organization of the Petroleum Exporting Countries said the reason prices nearly reached $100 a barrel last month had nothing to do with supply and demand but was instead the result of trading activities by commodity investors and hedge funds, and geopolitical instability.
"There is no reason for the price of oil to go to $100 a barrel," said Abdalla Salem el-Badri, OPEC's secretary-general.
Investors shrugged off Organization of the Petroleum Exporting Countries 's decision. Oil futures fell Wednesday to their lowest level in six weeks after a mixed government inventory report failed to offset a belief that supplies are growing faster than demand. Light, sweet crude for January delivery fell 83 cents to settle at $87.49 a barrel on the New York Mercantile Exchange.
January gasoline fell 3.47 cents to $2.217 a gallon, and heating oil fell 2.25 cents to $2.4893 a gallon. Natural gas rose 3 cents to $7.185 per million British thermal units.
Via: The Ney York Times / AP |
Tags: OPEC|associatedpress|nytimes|
