Economy takes over as OPEC's oil market fundamental

VIENNA (Reuters) – OPEC’s around midnight deal to keep output steady marked the third time this year it has opted for no policy change, citing first economic weakness and now economic recovery as a reason to ignore bulging oil stocks.

But the bottom line was the producer club’s confidence the return of investor appetite for riskier assets such as oil would be enough to sustain a robust market rally.

That prompted analysts to argue the Organization of the Petroleum Exporting Countries was embracing the speculation — which it has berated in the past — as a means of price support until a more tangible recovery in fuel demand.

In line with a wave of enthusiasm across financial markets, oil has already risen from a low just above $32 a barrel last December to above $70 now.

“You guys must realize that there is a fundamental change in the market,” Saudi Oil minister Ali al-Naimi told reporters ahead of the night-time meeting that agreed to keep supplies officially unchanged.

“Economic growth is the name of the game, that’s what’s going to drive the price. As long as economic growth is there, the price is going to go up.”

Reuters