OPEC to keep oil taps on hold ahead of winter

The Organisation of the Petroleum Exporting Countries (OPEC) oil producers prepared on Tuesday to weather a downturn in crude prices by keep...

The Organisation of the Petroleum Exporting Countries (OPEC) oil producers prepared on Tuesday to weather a downturn in crude prices by keeping output limits unchanged for the rest of the year.

Ministers arriving for a Wednesday meeting said they saw no need to cut supplies ahead of the rising northern hemisphere winter demand.

‘‘Nothing,’’ was Algerian Chakib Khelil’s verdict on what action ministers planned. Among early ministerial arrivals there was no dissent from that view.

Story continues below this ad

The OPEC sees no need for change despite a $2 downturn in oil prices in the past two weeks, triggered in part by its own confidence that it requires no supply cut at least until the first quarter of 2004.

That has allowed influential hedge fund speculators to take a large net short position, a bet on falling prices, on US Light crude futures, pushing prices to a four-month low.

‘‘OPEC cost themselves at least a dollar a barrel by signalling to the market ahead of time that they weren’t going to cut, giving the hedge funds a free ride,’’ said Gary Ross of New York consultancy PIRA Energy.

US Light crude rose 29 cents to $27.48 a barrel on Tuesday and an OPEC index of crudes was valued at $24.82, near the middle of its $22-$28 target range. —Reuters