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VIENNA: OPEC is widely expected to freeze its oil production ceiling when it meets on Wednesday as the cartel sits happy with crude prices trading above US$80.
Members of the Organization of Petroleum Exporting Countries have said they believe the cartel will agree to maintain its official oil output quota of 24.84 million barrels a day when it meets in the Austrian capital.
"This is going to be an easy meeting," UAE Minister of Energy Mohammad bin Dhaen al-Hamli told reporters on Tuesday after fellow OPEC member nations said there was no need to change the cartel's official production target.
Members have pointed to high oil inventories, insufficient demand and acceptable crude prices for the reasons why OPEC - which pumps about 40 per cent of the world's oil - does not need to change its output ceiling.
"There is no need to raise output ... Kuwait favours maintaining production quota," Kuwaiti Oil Minister Sheikh Ahmad Abdullah al-Sabah said on Tuesday before heading to Vienna - home to OPEC's headquarters.
However Kuwait, like other OPEC members, is calling for greater compliance with the cartel's official production ceiling as data show that the organisation is pumping more than its set target.
"Kuwait will push for more (output) compliance ... that is the major issue" at the upcoming OPEC ministerial meeting, said Sheikh Ahmad.
OPEC members are keen for greater compliance with the official output quota amid concern that demand for oil could weaken as governments look to end unprecedented measures that have put countries on a road to economic recovery.
Although crude oil futures rebounded Tuesday, traders said the market remained concerned about the demand outlook in the United States and China, the world's two largest energy consuming nations.
Oil prices rallied Tuesday from recent heavy losses to reach US$82 a barrel, as the US Federal Reserve kept interest rates on hold.
"Crude recovered its losses... and even more," said Andy Lipow of Lipow Oil Associates, adding that the weakening dollar was pushing investors into commodities.
"I think that by the end of the year we are going to see crude oil prices in the US$90 to US$95, as the global economy recovers and we see decline in production in many areas in the world."
Oil prices tumbled from historic highs of more than US$147 in July 2008 to about US$32 in December in response to the global recession but have since clawed back ground on economic recovery hopes.
Saudi Arabia, OPEC's de-facto head, on Monday said the cartel did not need to raise output as the market was in balance and current oil prices were pleasing for producers.
The cartel's second largest producer Iran meanwhile said that OPEC should not raise its official output ceiling as there was still no sign of any increase in world demand.
OPEC has had an official output level, excluding production by Iraq, of 24.84 million barrels a day since January 2009.
However the grouping of 12 Middle Eastern, African and Latin American oil producing countries pumped out 26.70 million barrels a day in February, excluding Iraq, according to the International Energy Agency.
Iraq does not have a quota owing to unrest in the country.
OPEC comprises Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
- AFP/sc
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