VIENNA, Austria OPEC has virtually ruled out pumping more oil to ease record-high prices, key oil ministers signaled Tuesday on the eve of a cartel meeting.
Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said the 13-nation group is shying away from boosting production because of the U.S. economic slowdown, political turmoil in the Middle East and expectations of slackening global demand for crude.
On Monday, oil surpassed the all-time record of $103.76 a barrel when adjusted for inflation. The previous record was $38, set in 1980 at the height of the U.S.-Iran hostage crisis. Oil held steady well above $102 in Asia trading Tuesday after nearly hitting $104 a day earlier.
"Because of the economic slowdown in the United States which is affecting world economic growth and world demand on oil this year I don't think OPEC will consider increasing its production," Khelil told reporters. "Stocks are very high ... and we are going to have less demand in the second part of the year."
Pressure has mounted on OPEC to raise output, which could help pull down prices which have hovered above $100 for weeks.
Since demand typically eases in the second quarter, however, OPEC was widely expected to take no action at Wednesday's meeting in Vienna.
"Politically, OPEC should increase output. But I think what they will actually do is nothing," said John Hall, of John Hall Associates in London.
Hall said one option would be to authorize Khelil to order an output increase or decrease in the coming weeks a gesture that would reassure jittery oil markets. OPEC's advisory committee, which makes recommendations to the entire cartel, planned to meet Tuesday afternoon.
Khelil held open the possibility of some kind of intervention Tuesday. He spoke after talks with Oil Minister Ali Naimi of Saudi Arabia, OPEC's top producing nation and its most influential member.
Kuwait and Libya are among OPEC members who have said the cartel should maintain its current output, estimated at about 29.7 million barrels a day roughly 40 percent of daily world demand.
However, Iran and Venezuela both hawkish on prices have pressed for a cut in output. Analysts said it was doubtful that the rest of OPEC would go along.
"A cut would have to be a consensus," said Rafel Ramirez, Venezuela's oil minister, contending any increase "would make no sense."
"Global markets are well supplied," Iranian Oil Minister Gholam Hussein Nozari said Tuesday, saying the weak U.S. currency is a greater concern.
Ramirez sees $90 a barrel as the long-term floor and suggested OPEC is determined not to allow prices to dip below level.
Yet the pricing trend has been up, not down.
Oil shot up 19 percent in February as tensions in the Middle East increased. Also supporting prices was a Turkish incursion into Iraq and the weak dollar.
Reducing output now "would remove a bullet from their arsenal which could be used more effectively at a latter stage if prices begin to fall," said Johannes Benigni, managing director of JBC Energy in Vienna.
"There's been a lot of suggestion about a cut, but I don't think we would support that based on what's happening with prices," said Nigeria's energy minister, Odein Ajumogobia.The 13 OPEC members are Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. Iraq is the only member not subject to the cartel's output quotas.
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