OPEC ministers say oil output will not increase, citing a weak global economy

AOL Canada (Money) ^ | February 28, 2008 | The Canadian Press

[NRG1973]

VIENNA, Austria - OPEC decided Friday against pumping more oil in a rebuff to the United States and a possible prelude to cuts as early as next month should the wounded U.S. economy sap demand for crude.

The decision arrived despite U.S. urgings - backed by other major consumers - for more oil on the market to cool prices and relieve inflationary pressures that have contributed to fears of a global economic downturn.

Oil prices dropped nearly US$3 a barrel Friday after the U.S. said employers cut jobs in January, renewing worries that a possible U.S. recession that could eat into oil demand as OPEC ministers suggested.

The 13-member Organization of Petroleum Exporting Countries insists that supplies were adequate and that speculators and geopolitical jitters - not oil availability - were setting prices.

OPEC said it is focused on near-term expectations: the likelihood of less demand as the Western hemisphere's heating season ends and before its summer driving season begins; the prospect of more barrels both from OPEC and non-OPEC nations, and fears that the market will shrivel if economic woes worsen.

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