Opec to keep oil quotas unchanged

The decision, made at a meeting in Caracas, marks a rejection of calls by some members to reduce quotas.

Host nation Venezuela has been at the forefront of the push for the group's members to cut back.

While oil supplies have improved, Opec members do not want to be seen pushing up prices which are already near record levels already, analysts said.

Venezuela has favoured a cut in the 28-million-barrel daily quota precisely because supplies are strong.

Speaking to Opec ministers, its president Hugo Chavez said the American way of life used too much energy.

But Saudi Arabia had different views, saying oil markets were "oversupplied and overpriced".

Consistent output

"The message will be as it has been - we continue to produce at a high level to supply the market," said Kevin Norrish of Barclays capital.

Opec's 11 member states, including Saudi Arabia, Iraq, Iran and Nigeria, control more than a third of the world's output.

Opec's output quota has stayed unchanged since mid-2005 to quell worries about supply shortages prompted by tensions between the US and Iran, the war in Iraq and terrorism in Nigeria among other reasons.

Crude oil on the US NYMEX slipped below $71 in advance of the meeting but climbed later closing at $70.45. Brent crude closed at $69.39.

Prices have fallen after the US said it would be prepared to start talks with Iran. Tensions between the two countries have pushed up oil to over $75 in recent weeks.

Figures show that Opec's output has consistently exceeded 28 million barrels a day, and is often close to 30 million a day.

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