Page last updated at 13:20 GMT, Wednesday, 17 March 2010

Oil price rises after Opec holds its output quota

Oil being pumped in Bahrain

The Organisation of Oil Exporting Countries (Opec) has agreed to keep to its existing oil output quota.

The decision was widely expected but nonetheless sent the price of the UK benchmark, Brent crude oil, up by 72 cents to $81.25 a barrel.

US light sweet crude was up 77 cents at $82.47 a barrel.

The oil producers' cartel is already exceeding its stated production target of 24.84 million barrels a day, but expects demand to mop up that extra.

Saudi Arabia's oil minister said he expected demand to rise strongly.

'Beautiful prices'

The minister, Ali al-Naimi, told the Reuters news agency just before the cartel's meeting in Vienna that he was content with the way things were going.

"Good demand, reliable supply, beautiful prices -- we are very happy," he said.

The kingdom, which is the second biggest oil producer in the world, behind Russia, said global demand would rise by one million barrels a day, with most of that coming from Asia.

But Opec's president, Germanico Pinto, said they could not be complacent about the health of the economy.

He said: "While there has been improvement in the oil market outlook in recent months, there is still a long way to go before we can feel at ease with the situation."

Jason Schenker, president of Prestige Economics, said: "Opec is responding to growth in the same way central banks are, in some way. They don't want to move until a nascent expansion turns into a more solid expansion, they don't want to raise production too soon."



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