Organisation of the Petroleum Exporting Countries (OPEC) ministers decided not to increase production quotas, that already have been raised four times this year.

The producer group has reached the end of a cycle that reinstates most of the supply curbs it put in place when oil prices crashed below $10 a barrel in 1998. Ministers are predicting that crude, priced above $30 will soon fall into their target range of $22 - $28, as the full impact of an increase in this year's daily output of 3.7 million barrels is felt. "We can only conclude that OPEC has more than fulfilled its role as a reliable oil supplier and that the true reasons for currently high prices lie behind a series of other factors," said OPEC president Ali Rodriguez of Venezuela.

Rodriguez took aim in particular at shrinking refining capacity in the United States, the world's biggest importer. Oil dealers reacted cautiously to the OPEC decision. London Brent futures rose just three cents to $32.05 a barrel with US Light crude unchanged at $34.02.

The group meets again on January 17, 2001 by which time oil market analysts expect a year-on-year deficit in inventories to have turned into a surplus. "At current production levels they are already oversupplying the market for 2001 requirements," said Gary Ross of US Consultancy Petroleum Industry Research Associates."

"If they want to sustain oil prices they may have to take action on cutting supply in the first quarter." OPEC effectively suspended the automatic price stability mechanism that earlier this month provided its latest increment of 500,000 bpd. The mechanism might well have triggered more crude at the end of this month because prices remain in advance of the group's target range.

Rodriguez, who as OPEC president would order extra output under the mechanism, said that no more crude was being released this year.Saudi oil minister, Ali al-Naimi left the door ajar for the slim possibility of extra deliveries, should prices go into orbit. He said Riyadh, in control of most of OPEC's spare capacity, could act alone on supply if necessary, but that more time was needed to assess the impact of earlier increases.

(Reuters)