- The Washington Times - Sunday, January 30, 2005

VIENNA, Austria (AP) — Consumers received no solace from OPEC, which said yesterday that oil prices near $50 per barrel would remain high through the spring, even as the cartel decided to keep its production ceiling unchanged.

The decision, reached at a truncated meeting of the 11-nation group, means that consumers worried about the price of winter heating oil and gasoline will likely see no relief in their bills or costs at the pump.

OPEC’s current quota of 27 million barrels a day was set in December, when the group agreed to shave output by 1 million barrels. But the 10 members of the group subject to the quota — Iraq is not bound by a limit — have been overproducing by a total of 500,000 barrels daily.

Kuwaiti Oil Minister Sheik Ahmad Fahd al-Ahmad al-Sabah, who leads the Organization of Petroleum Exporting Countries, said he was given permission to conduct a telephone meeting before the next gathering on March 16 in Iran to address output if market conditions warrant.

Mr. al-Sabah said prices have been driven higher amid fears of a cold winter in Europe and North America, where demand for heating oil is high. He said OPEC’s decision was aimed at bringing more stability to the market, and called on consumers and producers to “walk together … for prices to be acceptable.”

“Although there is no shortage of supply, the stocks have been built up and continue to be built up,” he said. “High prices led OPEC to arrive at the decision in the interest of stability and in the interest of the consumer, who likes to have stability in prices.”

The group also decided to temporarily suspend its price band of $22 to $28 a barrel, which was set in March 2000 and has largely been ignored since last year.

OPEC’s output decision also was a signal that it doesn’t believe that higher prices for its oil-to-fuel development in Asia, particularly in China, will cause any slowdowns.

“We think the high price will not affect the global economy,” Mr. al-Sabah said. “There won’t be a strong negative for the economy.”

OPEC, which accounts for one-third of the world’s oil supply, is seeking to keep its buyers — and their consumers — from becoming jittery that prices could resume their climb. Light sweet crude on the New York Mercantile Exchange hit a record $55.17 per barrel in late October and closed at $47.18 a barrel on Friday.

Consumers won’t see higher prices as a result of OPEC’s decision unless demand surges in the coming weeks, said William R. Edwards of Texas-based Edwards Energy Consultants.

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