OPEC set to maintain oil output, Chavez reiterates call for price floor

OPEC oil ministers reached an informal agreement going into talks Thursday not to alter current crude output, Qatar's oil minister said.

Photo: OPEC set to maintain oil output, Chavez reiterates call for price floor

Speaking shortly before OPEC met formally to decide production levels, Qatari Oil Minister Abdullah al-Attiyah said despite the market being oversupplied, "prices are still around US$70 (Ђ54) a barrel."

"At this price level, OPEC won't cut production," he added. "This is why we have decided to do nothing."

He did not give details about how or when members reached the informal agreement, which would presumably be approved later Thursday. Venezuela has urged countries to consider a production cut, but many OPEC members have said they would not support such a move.

Venezuelan President Hugo Chavez said there is an excess of oil on the world market and proposed a minimum price at US$50 (Ђ39) a barrel, an idea he has raised before but that OPEC has yet to put in place.

"There is enough oil on the market. We even believe there is an excess of oil on the market," Chavez said in a speech. "US$50 (Ђ39) is a fair price, but as a minimum. That's how we see it... Let's give it a $50 (Ђ39) floor and search for equilibrium."

He said the price "ceiling would be infinity."

The Venezuelan president has long championed the idea of keeping oil prices high within OPEC. For the last two meetings Venezuela has called on member countries to cut production, but other countries have been unwilling.

Chavez said members of the Organization of Petroleum Exporting Countries have no intention of increasing their oil production despite demands from a number of industrialized nations. He said OPEC has worked to give stability to oil prices even as the U.S. moved to invade Iraq and threatens Iran and Venezuela, reports AP.

O.Ch.