OPEC members voice fears over slow recovery

Top oil-producing countries expressed "grave concern" that a recovery from the economic downturn crippling energy demand will be slow and uncertain, as they held their output steady on Thursday.

"Since the market remains oversupplied and given the downside risks associated with the extremely fragile recovery, the conference once again agreed to leave current production levels unchanged for the time being," said the closing statement by OPEC.

"While there are signs that economic recovery is on the way, there remained grave concern about the magnitude and pace of this recovery, especially in the major industrialised nations of the OECD."

Opening the meeting, OPEC's current president insisted meanwhile that members defend their interests when world powers meet for a landmark United Nations summit in December to seal a new accord to fight climate change.

"There is much at stake here for both present and future generations in our member countries," said the current president, Jose Maria Botelho de Vasconcelos, oil minister for poverty-stricken Angola.

A recovery of the world economy, he added, "should leave us with more time to address bigger issues facing mankind, notably eradication of poverty, sustainable development and the environment."

Most ministers had given an upbeat view of the oil market as they prepared for the talks, saying crude prices were acceptably high.

But the cartel's secretary general Abdullah El-Badri said its members must chart a delicate course through the remainder of the downturn.

"We are walking on a very thin line, we have to be very careful," he told a news conference after the meeting. "We don't want to take action that will jeopardise the recovery that we are seeing."

Analysts said the OPEC members' final declaration offered a starkly realistic view of the uncertain months ahead.

"They really highlighted how tenuous talk of a recovery is," analyst Jason Schenker of the Texas-based consultancy Prestige Economics told AFP after the meeting.

"It's a white-knuckle year and I think this statement showed the white knuckles."

A vicious global economic downturn has sapped demand for energy, dragging crude prices from record highs of above 147 dollars in July 2008 to 32.40 dollars in December. They have since recovered to hover around 70 dollars.

This price level "is good for everybody, consumer (and) producer," said Saudi Oil Minister Ali al-Naimi, whose country is the biggest OPEC oil producer and its most influential member, ahead of the talks.

OPEC, whose 12 members pump 40 percent of the world's oil, agreed in late 2008 to remove a massive 4.2 million barrels of daily output from the market in order to halt the slide in prices.

Analysts say that compliance with the cuts agreed last year has slipped over recent months. They blame the overproduction mainly on Iran as well as on Angola and Venezuela.

Analysts say most member countries are satisfied with prices in the range of 70 to 80 dollars, enough to fund investment in future production.

Badri stressed: "We need to have more capacity, we need to add more oil to the market and we cannot do this without an adequate and reasonable price for oil for our member countries."

Oil prices rose modestly on Wednesday however, amid dollar weakness and investor optimism over the economy.

New York's main contract, light sweet crude for October delivery, settled at 71.31 dollars a barrel, up 21 cents from the closing level Tuesday.

In London, Brent North Sea crude for October delivery gained 41 cents to close at 69.83 dollars a barrel.