OPEC Announces No Increase In Production, Citing Weakening Global Economy

[hatrack]

VIENNA, Austria - OPEC decided Friday against pumping more oil in a rebuff to the United States and a possible prelude to cuts as early as next month should the wounded U.S. economy sap demand for crude. The decision arrived despite U.S. urgings - backed by other major consumers - for more oil on the market to cool prices and relieve inflationary pressures that have contributed to fears of a global economic downturn.

Oil prices dropped nearly US$3 a barrel Friday after the U.S. said employers cut jobs in January, renewing worries that a possible U.S. recession that could eat into oil demand as OPEC ministers suggested.

The 13-member Organization of Petroleum Exporting Countries insists that supplies were adequate and that speculators and geopolitical jitters - not oil availability - were setting prices.

OPEC said it is focused on near-term expectations: the likelihood of less demand as the Western hemisphere's heating season ends and before its summer driving season begins; the prospect of more barrels both from OPEC and non-OPEC nations, and fears that the market will shrivel if economic woes worsen. "In view of the current situation, coupled with the projected economic slowdown ... current OPEC production is sufficient to meet expected demand for the first quarter of the year," read a statement from OPEC following a meeting of its ministers.

EDIT

http://money.aol.ca/article/opec-meeting-3rd-writethru-bgt/118620/

[phantom power]

1. It's interesting how the answer is always "C -- no increase"

One of these fine days, the answer is always going to be "D -- decrease production." I'm looking forward to what stories they tell about that.

[katty]

2. no surprise-$5/gal by years end

[sinkingfeeling]

3. So even when George asked nicely, they turn him down.