OPEC Agrees to Keep Oil Production Quotas Unchanged

OPEC said it will keep oil production quotas unchanged, banking on a recovery in the world economy to maintain prices near today’s $71 a barrel.

The Organization of Petroleum Exporting Countries agreed to maintain total production quotas at 24.845 million barrels a day, and will urge members to adhere to their targets, OPEC Secretary-General Abdalla El-Badri in a press briefing. It’s the third time this year group has met without revising the figure.

“Holding production was the prudent thing to do,” Jason Schenker, president of Texas-based consultancy Prestige Economics LLC, said in an interview in Vienna.

The producer group, which accounts for about 40 percent of global crude supply, had been expected by analysts and most ministers to keep output unchanged after prices rallied. Oil has gained 61 percent this year, last month reaching the $75 level identified by Saudi King Abdullah as satisfactory for consumers and producers.

Crude oil advanced for a fourth day. The contract for October delivery traded up 31 cents, or 0.4 percent, at $71.62 a barrel on the New York Mercantile Exchange as of 1:52 a.m. Vienna time.

“This $65 to $75 range seems amenable to both producers and consumers,” Schenker said. “If they’d cut when production is above quotas, and prices are amenable, it may not have been received well.”

Three-Hour Talks

Algerian Oil Minister Chakib Khelil and Qatari Energy Minister Abdullah bin Hamad al-Attiyah confirmed the decision as they left OPEC’s headquarters at about 1 a.m. Vienna time today, after closed door talks lasting three hours.

OPEC agreed late last year to cut production targets by 4.2 million barrels a day after prices crashed more than $100 a barrel from a record set in July 2008. Oil dipped to $32.40 in December before recovering this year. In the past five months, production has risen from the 11 OPEC members bound by quotas.