VIENNA (Reuters) - OPEC ministers agreed to hold output steady and said oil prices which hit an all-time high on Wednesday were driven by factors beyond their control.
By Peg Mackey and Barbara Lewis
VIENNA (Reuters) - OPEC ministers agreed to hold output steady and said oil prices which hit an all-time high on Wednesday were driven by factors beyond their control.
U.S. crude struck a record of $104.64 a barrel.
The world's biggest fuel burner, the United States, had said even a token supply increase from the Organization of the Petroleum Exporting Countries would help to tame prices and limit any damage to a fragile world economy.
!ADVERTISEMENT!U.S. President George W. Bush was disappointed with Wednesday's OPEC decision, a White House spokeswoman said.
But OPEC ministers argued the oil market was pushed higher by a weak dollar, speculation and political strife, and not by a lack of crude.
"Yes, the production will not be changed," Iraqi Oil Minister Hussain al-Shahristani told reporters as he emerged from Wednesday's meeting.
Nigerian Minister of State for Oil Odein Ajumogobia said oil above $100 was uncomfortable and above $80 a barrel was high.
"The OPEC official position has been anything above $80 is on the high side," he said.
Washington said Tuesday a modest OPEC output increase of 300,000 bpd to 500,000 bpd could calm prices and help to limit any economic damage.
"I think it's a mistake to have your biggest customer's economy to slow down ... as a result of high energy prices," Bush said.
U.S. TO BLAME
OPEC President Chakib Khelil said the United States, not OPEC, was to blame for high prices.
The U.S. slowdown had lowered the value of the dollar, he said, and encouraged speculative flows into oil and other dollar-denominated commodities.
"What's happening in the oil market is due to the mismanagement of the U.S. economy, which is probably affecting the rest of the world," Khelil told a news conference.
Khelil, who was among ministers who had backed a cut in output, said a U.S.-led economic slowdown would lead to lower oil demand in the second quarter and for the rest of the year, causing oil stocks to build.
The latest U.S. government data released Wednesday showed gasoline stocks had reached a 14-year high, partly in response to slower demand, although overall crude inventories had fallen.
The dip in crude stocks, as well as a dispute that has pitted OPEC members Ecuador and Venezuela against Colombia, helped to trigger Wednesday's oil market surge.
OPEC's next scheduled meeting will be on September 9.
But the 13-member group, which pumps more than a third of the world's oil, has said it would monitor closely the supply-demand balance.
It could use producer-consumer talks next month in Rome to review the situation.
In any case, Wednesday's no-change decision allows for quiet shifts in OPEC production.
Top exporter Saudi Arabia has consistently pledged to keep the market well-supplied with oil.
Saudi Arabian Oil Minister Ali al-Naimi said the kingdom had
been pumping 9.2 million barrels per day (bpd) "day in, day out," which is roughly 300,000 bpd above its formal OPEC output target.
(additional reporting by Randy Fabi, Simon Webb, Alex Lawler and Summer Said, Writing by Barbara Lewis, editing by Matthew Lewis)
