Oil exporters agree to keep output at current high level

TOP oil exporter Saudi Arabia and fellow OPEC producers signalled on Saturday that they would keep oil output near its current 25-year high for now, satisfied the policy is easing pressure on consumer economies.

But a $12 drop in the price since mid-July and forecasts that demand for OPEC oil will decline in 2007 are beginning to worry some in the group, which pumps a third of the world’s oil.

The Organisation of the Petroleum Exporting Countries, which met in Vienna over the weekend, has pumped steadily for over a year to fill consumers’ oil tanks and guard against supply shocks.

The Saudi-driven policy has succeeded, with no demand left unmet.

The cost of oil, meanwhile, has fallen from its $78.40 a barrel record high of July 14, when Israeli strikes on Lebanon led to fears of a wider Middle East conflict. But, at $66, oil prices are still up $5 per barrel this year on 2005, while oil is three times as expensive as at the start of 2002.

“OPEC in general and Saudi Arabia in particular have done their best to supply the world with what it needs, prices are coming down and I hope no one is concerned about a shortage of supply,” said Saudi Oil Minister Ali al-Naimi.

Officials from Algeria, Libya, the United Arab Emirates and Iran agreed on Saturday that OPEC would keep its current output of 28 million barrels per day.