OPEC split over output policy - For Those Who are interested to Read

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OPEC countries are divided over whether the oil cartold should increase or freeze its output at a meeting on Tuesday at the group s headquarters in Vienna, ministers said.

"Everything is on the table, but there is no consensus," said Venezuelan Energy Minister Rafael Ramirez during a break in talks.

His Qatari counterpart Abdullah bin Hamad al-Attiyah echoed: "No consensus."
The 12-member cartold had been widely expected to freeze its output, but Saudi Arabia is believed to have spearheaded a campaign for higher production, raising uncertainty about the outcome.

The most likely options are either an increase in the group s production target of 500,000 barrels per day, no change, or a middle-ground pledge of delayed output increases.
A final decision will be announced any time in the coming hours as tense negotiations continue here.

Algerian Energy Minister Chakib Khelil advocated reassessing the oil market at meetings in November and December, saying it was too early to be confident about oil demand.
Khelil drew parallels with an OPEC meeting in Jakarta in 1997 when Saudi Arabia forced through an output increase just as the Asian financial crisis was unfolding.

Fears of a recession and reduced demand sent oil prices into a tailspin and they crashed to 10 dollars in 1999.

"Right now we don t see sufficient evidence that there s a need (for an output hike)," he told journalists during a break in the one-day meeting.

"We need to wait. We still have a meeting at the summit (in November in Saudi Arabia) and an extra meeting in December where we could make the right decision and not the wrong decision -- like what happened in Jakarta before where we had the same situation and we made the wrong decision."

Global financial markets have been in turmoil in recent months due to problems linked to the US housing crisis.

Many economists have lowered their forecasts for global economic growth, but the impact of the market turmoil and tightening credit conditions can not be assessed at present.
Some have suggested the US economy is heading for a recession if housing problems lead to a fall in consumer spending.

"OPEC has to closely follow the financial situation of American markets to evaluate (future oil demand)," added Ramirez. "It is too earlier for that."

High oil prices have become an added burden for the world economy as it absorbs the financial market turbulence and the crisis in the US "subprime" home loan market.
The 10 OPEC members that are bound by production limits have a current production target of 25.8 mln barrels, but they are estimated to be producing almost a million barrels a day more than this.

Any increase would therefore formalise unofficial production above the output limit, but analysts have said the gesture would help cool prices.

A majority of OPEC members have spoken publicly against an output increase, but there are signs that some might be faltering under pressure from Saudi Arabia, notably Kuwait and Algeria.

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