OPEC stands pat on output

ABU DHABI, United Arab Emirates -- OPEC hedged its bets Wednesday, opting to keep production steady but setting a new meeting for Feb. 1 to raise output if prices skyrocket.

Benchmark crude prices rose on word of the decision, but the prospect of a review early next year -- and its potential to raise production ceilings if warranted -- checked the upward trend.

After spiking by about $2 on news that present levels would be maintained, light sweet crude for January delivery reversed course and settled 83 cents lower at $87.49 a barrel on the New York Mercantile Exchange, oil's lowest close since Oct. 24.

Price levels were more than 10 percent off the record of almost $100 a barrel set last month, suggesting the choice by the Organization of Petroleum Exporting Countries would not roil markets -- at least in the short term.

A final communique from OPEC's oil ministers' meeting in Abu Dhabi said the group would leave output unchanged "for the time being," because the world was "well supplied" and crude reserves were at comfortable levels.

"We have enough stocks in the market," OPEC Secretary-General Abdalla Salem el-Badri said. "There is no reason for prices to go (to) $100 a barrel," he added.

Still, the statement expressed concern about market volatility driven by speculation and suggested OPEC was ready to step in if needed by taking "every measure deemed necessary to keep market stability through the maintenance of supply and demand in balance."

Wednesday's decision by oil ministers of the 13-nation group seemed to suggest that OPEC now views prices near or above $90 -- an increase of about $40 since the start of the year -- as acceptable.

The U.S. and other energy-hungry nations had been hoping for a decision to raise levels by at least 500,000 barrels a day. But Nobuo Tanaka, the head of the International Energy Agency -- the oil and gas monitor for industrialized nations -- noted far more OPEC crude was already available than what the estimated output figures of the 10 nations under production quotas reveal.

Total OPEC output is estimated at about 31.5 million barrels a day -- about 40 percent of daily world demand estimated at about 85.5 million barrels.