OPEC to keep production steady

Ignoring concerns of slowing economic growth, testy stock markets and signs of a melting housing market, OPEC ministers on Thursday decided to keep oil production restrained despite calls to pump more supplies into an increasingly tight market.

OPEC’s decision to keep oil output at their current levels could send oil prices soaring this spring as demand for gasoline picks up. Retail gasoline prices in the United States have already risen since the beginning of the year, reaching about $2.60 a gallon on average last week, nearly 40 cents more than in January.
“$3 a gallon is just around the corner,” said Jason Schenker, an economist at Wachovia. “We’ve never seen retail gasoline prices rise so much so early in the year.”

This year is shaping as yet another year of small growth in oil supplies and solid rise in energy demand. For consumers in the West, this will translate into another summer of high gasoline prices and stiff energy bills. Demand for oil from refiners usually picks up around April and May when seasonal maintenance ends and refineries begin producing more gasoline out of crude oil.

International Herald Tribune