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Oil steady ahead of Opec meeting Opec downplays output rise hopes
(about 1 hour later)
Oil prices remained steady ahead of a meeting in Abu Dhabi of oil producers' cartel Opec, which is under pressure to raise output to dampen prices. Oil producers' cartel Opec is likely to keep output steady at a meeting in Abu Dhabi later, despite pressure to raise production to dampen prices.
A barrel of US light sweet crude rose eight cents to $88.40 a barrel in Asian trade, far below the highs seen in recent weeks, when it passed $99. "We've seen nothing yet to justify an increase or a decrease," said Saudi oil minister Ali Al-Naimi.
Prices have fallen on speculation that Opec will up output and reports that downplayed Iran's nuclear ambitions. A barrel of US light sweet crude rose eight cents to $88.40 a barrel, far below recent highs, when it passed $99.
Some analysts doubt that Opec will increase output. Prices had fallen on talk that Opec would raise output and reports that downplayed Iran's nuclear ambitions.
"Our position is that demand and supply are balanced and there is no need to increase oil on the market," said Iranian oil minister Gholamhossein Nozari.
Mixed viewsMixed views
The members of the Opec cartel account for 40% of the world's oil supply. Opec members account for 40% of the world's oil supply.
Officials from Qatar, Venezuela, Iran and Libya have previously spoken against the need to pump more oil, while ministers from Indonesia, Nigeria and Kuwait said they were still open to increases.Officials from Qatar, Venezuela, Iran and Libya have previously spoken against the need to pump more oil, while ministers from Indonesia, Nigeria and Kuwait said they were still open to increases.
Some Opec ministers have argued that there are enough supplies to keep consumers warm in winter. They blame speculators for volatile prices.Some Opec ministers have argued that there are enough supplies to keep consumers warm in winter. They blame speculators for volatile prices.
"All options are open," Saudi oil minister Ali al-Naimi told reporters, ahead of the meeting. Recent falls in the oil price have made analysts doubt that Opec will announce any rise in output quotas.
Scepticism
Recent falls in the oil price have made some analysts doubt that Opec will actually raise output.
"It is not whether Opec raises production or not - they already have - but it is whether or not they legitimise that overproduction by raising their quotas," wrote Phil Flynn, an energy analyst with Alaron Trading."It is not whether Opec raises production or not - they already have - but it is whether or not they legitimise that overproduction by raising their quotas," wrote Phil Flynn, an energy analyst with Alaron Trading.
"$90 a barrel is the line in the sand and if oil is below $90, like I expect it will be then Opec will not raise their production," Mr Flynn added."$90 a barrel is the line in the sand and if oil is below $90, like I expect it will be then Opec will not raise their production," Mr Flynn added.
Oil prices lost ground on Tuesday, following a report that downplayed Iran's nuclear ambitions.Oil prices lost ground on Tuesday, following a report that downplayed Iran's nuclear ambitions.
Tension between the US and Iran has contributed to the rally in oil prices.Tension between the US and Iran has contributed to the rally in oil prices.
The US report by the National Intelligence Estimate said Iran had halted its nuclear weapons programme in 2003, contradicting the US administration's previous view.The US report by the National Intelligence Estimate said Iran had halted its nuclear weapons programme in 2003, contradicting the US administration's previous view.