OPEC ministers were all but certain to leave output targets unchanged at a meeting late on Wednesday after the top exporter Saudi Arabia said there was no need for action.
So far, none of the 12 OPEC members has stated any need to cut production as prices above $71 a barrel and signs of a strengthening world economy have shifted the focus away from high inventory levels and still sluggish fuel demand.
With the price ranging between $68 and $73, what else do you want? The price, everybody likes, consumers and producers, Saudi Arabian Oil Minister Ali al-Naimi told reporters when asked if OPEC needed to change its output policy.
OPEC could still ask members to comply more closely to existing output curbs, which would amount to an unofficial supply cut, although 100 percent discipline is regarded as impossible.
In a statement to the Saudi-owned al-Hayat published on Wednesday, Naimi made even clearer he did not expect the Organization of the Petroleum Exporting Countries to cut supply officially.
The Saudi Oil Minister Ali Al-Naimi expects -- in a statement to al-Hayat in Vienna -- that the OPEC meeting, which takes place this evening in Vienna will not amend the oil production level, the newspaper said.
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 recovered, it was setting its sights on roughly $75 as an 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.
Saudi Arabia's price target so far has proved realistic as the oil market has rallied from last December's low of $32.40, the weakest in nearly five years, to a high for this year of $75 hit at the end of August.
Buoyed by a wave of confidence across financial asset classes that recovery is under way, the price has held close to that level, although some OPEC ministers have pointed to uncertainties that could undermine the oil 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.
We think in the world economy there is still some uncertainty. We don't want to damage the world economy... We have to be very careful about the world economy and push toward normal growth, said Qatari Oil Minister Abdullah al-Attiyah.
I don't think now is the right time to cut production.
OPEC has kept official output targets steady since it announced late last year a record cut of 4.2 million barrels per day from September 2008 production.
But 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 views as comfortable.
A major issue will be compliance. It will be discussed and stressed by many countries with the hope others will comply, a Gulf delegate said.
OPEC must still consider cutting output eventually, some analysts have said.
I think they should be thinking about reducing output every day, said Eugen Weinberg of Commerzbank.
Inventories do not seem to be going down despite economic hopes. For the moment, the market is not concerned about the build up... but fundamentals will come back into the picture.
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(Additional reporting by David Sheppard, Rania El Gamal, Henrique Almeida and Alex Lawler. Writing by Barbara Lewis; editing by William Hardy)