OPEC was set to keep output targets steady at a meeting late on Wednesday after top exporter Saudi Arabia looked to economic strength to bolster the oil price and dismissed bulging inventories.

International benchmark U.S. crude climbed above $72 a barrel on Wednesday, close to this year's high of $75 hit at the end of August.

Saudi Arabia, which has led calls to maintain the Organization of the Petroleum Exporting Countries' agreed curbs, said a fundamental shift in the oil market meant big stockpiles were irrelevant.

You guys must realize that there is a fundamental change in the market. Economic growth is the name of the game, that's what's going to drive the price. As long as economic growth is there, the price is going to go up, Saudi Oil Minister Ali al-Naimi told reporters.

We are happy where it (the price) is, and it's going to be there for a while, he said further, but he did not expect a re-run of the rally to nearly $150 in July last year, which was followed by a crash to just above $32 a barrel in December.

Other members of the 12-member group, which supplies more than a third of the world's oil, said there was general agreement to stick to current output curbs.

Even Venezuela, which in the past has been quick to urge OPEC to drive the price higher, has said output levels should be maintained, although its Oil Minister Rafael Ramirez stayed away from Wednesday's meeting.

He was instead in non-OPEC Russia -- which unusually was not invited to attend Wednesday's conference as an observer -- accompanying his president on a tour of Europe and the Middle East.

OPEC began meeting around 10 p.m. (2000 GMT) following Ramadan fasting.


Early this year, when the economy was still fragile, Saudi Arabia said it could tolerate oil prices of around $50 a barrel.

By May, as the world's finances began to recover, it was setting its sights on roughly $75 as a reasonable level for producers, needing to invest in new supplies, and consumers reeling from the financial crisis unleashed after the collapse of Lehman Brothers on September 15 last year.

As oil has been buoyed by growing confidence across asset classes, Saudi Arabia's price target has so far has proved realistic, although some OPEC ministers have pointed to uncertainties that could undermine the market.

For now, those doubts added to the reasons to keep supply policy unchanged as any sudden rise in the oil price could set back recovery, with negative implications for fuel demand.

OPEC could still ask members to comply more closely with existing curbs, which would amount to an unofficial supply cut, although 100 percent discipline is regarded as impossible.

The group has kept official output targets steady since it announced late last year a record cut of 4.2 million barrels per day (bpd) from September 2008 production.

As the oil market has rallied, OPEC has reduced compliance from a peak of around 80 percent of agreed cuts to less than 70 percent. In all, the 11 OPEC members with output curbs are overproducing by an estimated 1.36 million bpd.

The lapsing discipline has contributed to an inventory build that has taken stocks to the equivalent of nearly 62 days of forward cover, according to the International Energy Agency -- around 10 days more than OPEC has typically viewed as comfortable.

Naimi said, however, 52-53 days of forward cover was now too tight in the light of changing market conditions and current inventory levels were not a worry.

Algerian Energy and Mines Minister Chakib Khelil took a similar view.

In the past, we had a correlation between stocks and prices. As stock levels increased, prices went down. Then in early 2009, we just saw something different. So, it's very difficult now to say that 62 days is bad, Kheil told Reuters.

Some analysts have said OPEC must still consider a formal cut in output eventually.

Others argued that if a seasonal draw in stocks took place, as expected during the fourth quarter of this year and first quarter of the next, the group would have done enough.

As long as you get a draw of 1 million barrels per day in Q4 and Q1, OPEC has got the market well and truly under its thumb, said Lawrence Eagles of J P Morgan.

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(additional reporting by David Sheppard, Rania El Gamal, Karin Strohecker, Henrique Almeida and Alex Laler. Writing by Barbara Lewis; editing by William Hardy)