OPEC ministers Wednesday agreed to keep production quotas at an 11-year low to maintain oil prices at about $25 a barrel at a time of slowing world demand.
Members said they want to increase output after their September meeting, choosing to wait for world economies to rebound. Concern about possible disruptions to oil supply because of violence in the Middle East has contributed to a 26% jump in prices this year to $25.24 a barrel in London.
"The current price is reasonable," said Saudi Arabia's oil minister, Ali Ibrahim Naimi. "They are at a level where we don't need to make any change right now. We will increase output when the time is right, and hopefully that will be later in the year."
With prices rising, the Organization of the Petroleum Exporting Countries has been pumping more than promised to raise additional revenue and fight Russia, Norway and other rivals for market share. The quota of 21.7 million barrels a day is the lowest since the Persian Gulf War.
Oil demand this year may rise at less than half the average during the 1990s, the International Energy Agency estimates. OPEC's restraint has helped bolster prices, with the group's benchmark at $24.61 a barrel Tuesday, within its $22 to $28 target range.
The decision had been expected by traders. Benchmark Brent crude oil rose 4 cents to $25.24 a barrel Wednesday in London.
Iran's oil minister, Bijan Namdar Zanganeh, said an increase in output is probable in the fourth quarter.
Naimi said it's too early to judge the effect of plunging stock markets worldwide on prospects for the oil market. The Standard & Poor's 500 stock index is down 16% this year and at its lowest level since after the Sept. 11 attacks on the U.S. Investors said prices may stay high.
"OPEC is continuing to control the market quite effectively," said Robin Batchelor, who helps manage about $1.7 billion at Merrill Lynch Investment Managers.
Ten of OPEC's 11 members--all except Iraq--have output quotas. Those quotas were cut for a fourth time in a year Jan. 1, falling by 1.5 million barrels a day as the group anticipated a drop in world demand after Sept. 11.