OPEC Postpones Production Desion To Dec. 17 Meeting As Oil Prices Slump

November 29, 2008 6:53 a.m. EST

Cairo, Egypt (AHN) - The much anticipated meeting on Saturday of the 13-member Organization of Petroleum Exporting Countries (OPEC) did not result into production cut.

The members of the cartel have delayed the decision on whether to keep the supplies at the current level or to reduce the output.

The OPEC countries believe that they will know the impact report on previous oil output cut decision by next meeting, without which they may not be able to decide the fate of current decision.

The market analysts were expecting the group to finalize their decision to slash supplies by as much as 1.5 million barrels per day amid rising concerns on dropping oil prices and declining gasoline demand in huge markets like the United States.

OPEC, which pumps out almost 40 percent of globe's total oil production, may now decide to cut oil out in their next scheduled meeting on Dec.17 in Oran, Algeria, as the members try to level the prices of crude to range between $70 per barrel and $100 per barrel.

In a scheduled meeting last month, OPEC had decided to cut around 5 percent or 1.5 million barrels per day of production from Nov. 1. Despite product cut, oil prices have tumbled by almost 62 percent from the peak of $147.27 on July 11.

"This meeting is a preparatory meeting for a more resolved and firm decision in Algeria," Saudi Oil Minister Ali al-Nuaimi was quoted saying by AFP news agency on Saturday.

According to the group's estimate, the OPEC countries have lost as much as $700 billion since the drop of oil prices and some members even complaint of having hard time selling the barrels as the countries deal with increased domestic stockpiles.

The world's largest economy has reported a rise in inventories over the last few weeks as the drivers in the U.S. are cautiously using gasoline amid large increase in the unemployment rate, weak consumer spending and deepening recession.

The U.S. Energy Department said in a reported that the crude-oil supplies or inventroeis have increased by 7.28 million barrels to 320.8 million barrels for the ninth consecutive time last week.

While, the stockpiles for gasoline moved up by 1.84 million barrels, or 0.9 percent, to 200.5 million barrels, which was also more than anticipated growth by the market analysts.