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Last Updated: Wednesday, 8 March 2006, 20:50 GMT
Oil prices dip on Opec decision
Oil pipelines
Keeping crude oil flowing is key to the global economy's prospects
Oil prices fell on Wednesday after producers' cartel Opec left output levels unchanged and the US reported a rise in American crude stocks.

Despite the expected jump in US stocks - up 6.8 million barrels to 335.1 million barrels last week - Opec was also predicted not to cut output.

With supply problems still surrounding Iraq, Nigeria and Iran, Opec decided to keep pumping at near capacity.

A barrel of US light crude oil ended the day down $1.56 to $60.02.

London Brent crude settled $1.14 lower at $60.03 per barrel.

Nuclear dispute

Supply concerns in Iraq are being caused by the continuing violence there, while anti-government militants in Nigeria are attacking facilities in the main oil-producing region.

There are simply too many geopolitical factors to change production
Opec president Edmund Daukoru

At the same time, unease continues over Iran's nuclear ambitions, in a growing international dispute that could lead to the introduction of United Nations sanctions, hitting Iranian oil exports.

These supply uncertainties come at a time when booming growth in the US and emerging economies such as China and India is also putting pressure on supplies.

Maximum levels

"There are simply too many geopolitical factors to change production," said Opec president Edmund Daukoru late on Tuesday.

Opec members include Saudi Arabia, Iraq, Iran and Nigeria. The cartel provides more than a third of the world's oil.

Opec's output has consistently been more than 28 million barrels a day, and often close to 30 million a day, figures have shown.

That is approaching maximum levels and analysts warn that there is little slack in the system.


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