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OPEC expected to keep output steady at March meeting

Business Materials 4 March 2008 10:19 (UTC +04:00)

(dpa) - OPEC oil ministers are expected to leave oil output levels unchanged at the Organization of the Petroleum Exporting Countries' meeting Wednesday, ignoring both western calls to open the pumps as well as demands by some cartel members to cut production.

Analysts believe production quotas are likely to remain unchanged in view of current price levels, with OPEC crude peaking at 96.50 dollars per barrel (159 litres) on Friday.

Oil prices are buoyed by concerns over unrest in OPEC member states Venezuela and Nigeria as well as the weak dollar.

OPEC which pumps about 40 per cent of the world's crude, had hinted at cutting production ahead of the meeting.

Chakib Khelil of Algeria, who holds OPEC's presidency, said the 13 cartel members would decide either to hold production quotas steady or to cut "in order to restore market balance and stability."

OPEC currently produces 29.79 million barrels per day, not including Iraq. Total OPEC crude production averaged 32.0 million barrels in January, the cartel said.

US-oil prices soared to 103.76 dollars in New York on Monday. Oil prices have doubled since the start of 2007, largely driven by rising energy demands from power-hungry China or India, analysts said.

OPEC members are reaping the benefits of the skyrocketing prices, maintaining that the market is well-supplied.

Members Iran and Venezuela had called for production cuts, citing falling demand in the second quarter - due to warmer temperatures in the Northern hemisphere - to exert pressure on crude prices.

Over the past weeks, the United States and Japan called on OPEC to increase production fearing that rising oil prices to negatively affect the already sluggish economy.

Most cartel members however support doing nothing at this meeting and leave output quotas unchanged for the time being, as OPEC did in an extraordinary meeting held on February 1, and leave production cuts for a time when oil prices could slump again to the 80-dollar- mark.

OPEC is comprised of Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela, with Iraq being the only member not accorded an output quota due to continued unrest.

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