Oil prices hover at $57 a barrel after OPEC keeps output unchanged

Oil prices edged higher Friday after the Organization of Petroleum Exporting Countries agreed not to change its output targets, as expected.

Light, sweet crude for April delivery rose 16 cents to $57.71 a barrel in morning trading on the New York Mercantile Exchange. The contract fell 61 cents to settle at $57.55 a barrel on Thursday.

May Brent crude on the ICE Futures exchange in London slipped 3 cents to $60.65 a barrel.

OPEC ministers said Thursday at a meeting in Vienna that they had decided to maintain the oil cartel's crude production at existing levels, satisfied that two recent rounds of output cutbacks have helped boost sagging oil prices and balance global oil markets.

"The market is stable, the market is healthy," said OPEC Secretary General Abdalla Salem El-Badri of Libya. "We don't need to touch it this time."

OPEC, though, also warned that oil price volatility is likely to continue in 2007. Prices have zigzagged recently, sometimes sharply during the same day, buoyed by tensions with Iran and weighed by mild winter temperatures in the Northeast. OPEC agreed to meet again on Sept. 11 to review market conditions.

The market had expected OPEC to keep the status quo. Still, production could fall if ministers comply with cuts agreed on in the past four months.

In meetings late last year, OPEC agreed to take a combined 1.7 million barrels a day off global oil markets as they sought to shore up sagging oil prices and shrink burgeoning inventories. Actual cuts have been only about 1 million barrels a day.

"Oil markets will likely shift their focus back to Iran now that OPEC's meeting has ended with no surprises," said Sucden Commodity brokers.

"Investors are likely to turn their attention back to the ongoing row over Iran's nuclear program, while major powers have already reached some consensus on a package of new U.N. sanctions against the country," Sucden said.

The U.N. security council is expected to vote on draft sanctions against Iran next week.

Oil prices recently have also been reacting to the stock market, as dips in U.S. stocks spur fears of possible weaker demand. In morning trading, the Dow Jones industrials traded at about 12,177, up 17 points, reports AP.

In other Nymex trading, heating oil futures rose nearly one penny to $1.6969 a gallon, while natural gas prices declined by 3 cents to $6.929 per 1,000 cubic feet. Gasoline futures gained nearly 2 cents to $1.9005 a gallon.