Opec refuses oil production cuts

Oil is far below the record of $147 a barrel reached in July

Opec energy ministers have decided to leave oil production quotas unchanged after talks in the Egyptian capital following falls in the price of oil.

Opec President Chakib Khelil said any such decision would be made at a meeting in Algeria next month.

The price of a barrel of oil has tumbled to below $55 after peaking at a record $147 in mid-July.

Opec members have lost billions of dollars as demand has dropped in the face of the global economic downturn.

Opec member Venezuela favours a cut in output of a million barrels a day to try to boost prices.

But several Opec ministers had already dampened expectations that a cut in production would be announced this weekend.

Balancing demand

After Saturday's meeting, Opec President Chakib Khelil said ministers had agreed "to take any additional action on 17 December to balance oil supply and demand".

Falls in demand in the US, the world's top energy consumer, and other industrialised countries, have helped drive prices down from a record peak of more than $147 a barrel.

Opec, which accounts for 40% of global oil production, cut output by 1.5 million barrels a day last month, but the move failed to stop prices from declining.

While cartel members have not ruled out making another output cut, some say the impact of the existing cuts still have to be felt.

"Combined with weakening non-Opec supplies, the projected...output curtailment suggests that the oil market could actually tighten moving into 2009," Barclays Capital said in a research note.