Oil prices slid, but hovered around US$48 on worries that supply cuts from OPEC producers before the end of the first quarter. US light crude dropped to US$47.85 a barrel and London’s Brent crude stood at US$45.52 a barrel.
OPEC memebers, in a meeting at Vienna, kept official production limits steady at 27 million bpd despite oil prices close to US$50 a barrel, confident that higher fuel costs were not damaging global economic growth. The cartel formally abandoned its $22-$28 price target and appears set to defend $40 a barrel, by leaving the door open to cutting production later to contain a second quarter stockbuild when the northern winter ends. OPEC will meet next at Isfahan, Iran, on Mar. 16, but ministers could agree on an output cut by telephone before, depending on demand slowdown.
OPEC will be watching US stockpiles post winters, when demand hits a seasonal low. US crude oil inventories are running 9% above year-ago levels and gasoline stockpiles are up 3%, although fires at two US refineries have raised concerns over motor fuel supplies months before the peak summer season.