ABU DHABI, United Arab Emirates — OPEC hedged its bets Wednesday, opting to keep production steady but setting a new meeting for Feb. 1 to raise output if prices skyrocket.
Benchmark crude prices rose on word of the decision, but the prospect of a review early next year _ and its potential to raise production ceilings if warranted _ checked the upward trend.
After spiking by about $2 on news that present levels would be maintained, light sweet crude for January delivery reversed course and settled 83 cents lower at $87.49 a barrel on the New York Mercantile Exchange, oil's lowest close since Oct. 24.
Price levels were more than 10 percent off the record of almost $100 a barrel set last month, suggesting the choice by the Organization of Petroleum Exporting Countries would not roil markets _ at least in the short term.
A final communique from OPEC's oil ministers' meeting in Abu Dhabi said the group would leave output unchanged "for the time being," because the world was "well supplied" and crude reserves were at comfortable levels.
"We have enough stocks in the market," OPEC Secretary-General Abdalla Salem el-Badri said. "There is no reason for prices to go (to) $100 a barrel," he added.
Still, the statement expressed concern about market volatility driven by speculation _ and suggested OPEC was ready to step in if needed by taking "every measure deemed necessary to keep market stability through the maintenance of supply and demand in balance."
Wednesday's decision by oil ministers of the 13-nation group seemed to suggest that OPEC now views prices near or above $90 _ an increase of about $40 since the start of the year _ as acceptable.
The U.S. and other energy-hungry nations had been hoping for a decision to raise levels by at least 500,000 barrels a day. But Nobuo Tanaka, the head of the International Energy Agency, the oil and gas monitor for industrialized nations, noted that far more OPEC crude was already available than what estimated output figures of the 10 nations under production quotas reveal.
Total OPEC output is estimated at about 31.5 million barrels a day _ about 40 percent of daily world demand estimated at about 85.5 million barrels, with the 10 OPEC members under quotas pumping over 27 million barrels a day.
"While the lack of a formal output increase by the OPEC 10 may do little to calm current market anxiety, the IEA recognizes that total OPEC output has been much higher," he said from Paris. "And there are signs that more OPEC oil may be on its way in December."
Angola was not under quotas going into the Abu Dhabi meeting and Iraq is indefinitely freed from production constraints. Increased output from them is helping the supply picture going into December and January along with the return of around 600,000 barrels a day of oil from the United Arab Emirates as a program of maintenance ends.
Reduced demand growth forecasts from both OPEC and the IEA have pushed prices down recently, along with the extra oil reaching markets from the last OPEC production increase.
A new U.S. intelligence report concluding that Iran halted its nuclear weapons development program in 2003 also apparently played a role in OPEC's decision to hold levels steady.
Still some analysts criticized the OPEC decision, suggesting the organization had opted for maximum profits and missed a chance send a signal it was more concerned about price stability.
Peter Beutel, president of the U.S. energy risk management firm Cameron Hanover, said oil ministers now considered prices above $90 a barrel "as their birthright," and criticized "OPEC's greed."
Oil analyst John Hall of John Hall Associates in London said that while OPEC argues that "because the price has fallen by 10 percent over the past week the market is stabilized .... they won't accept is that the price of oil has fallen because the market was of a view that they would increase output."
Still, he said that any OPEC decision to meet in January should cap prices at around the $90-95 level as traders wait to see what that gathering decides.
"There is uncertainty as to what they're going to do," he said. "And that level of uncertainty will prevail until we know ... what they will do and how they implement what they decide to do."
But a hard winter weather could skew such calculations. Any prolonged cold snap in the Western hemisphere, China and Japan could draw down on stocks and add to consumers' heating bills, with a February decision to increase output levels coming too late to contain the damage.
"It means that during the winter there will be no additional supplies," said chief analyst Ehsan Ul-Haq of PVM Oil Associates in Vienna, Austria. "How good the choice was depends on how cold winter is going to be."
Analyst Omar Nokta of New York's Dalhman Rose investment bank suggested that OPEC will be faced with strong arguments to increase levels in February, saying the U.S. and major world consumers are "going to come out of the winter having substantially drawn down" on oil and related stocks.
OPEC oil ministers went into the meeting facing a tough choice. Agreement on an increase in output ceilings would have reassured volatile markets that have seen wild swings over the past few weeks, including a nearly $10 drop over five days last week that was the largest ever in nominal terms.
But such a decision could have sharply accelerated oil's decline in price _ which, if it continues long term would cut into OPEC revenues already suffering from a weak dollar.
An OPEC decision to raise output just before the 1997 Asian financial crisis led to oil prices plummeting from $20 to $12 a barrel _ a development ministers appeared determined to avoid amid uncertainty on the state of key world economies.
At its last meeting, in Vienna, Austria, OPEC agreed to raise oil output by 500,000 barrels a day to restrain ballooning prices. Instead prices spiked, reaching a trading record high of $99.29 last month before leveling off _ a trend that had led to predictions that the group would opt to again raise output ceilings in Abu Dhabi.