CARACAS -- OPEC, pumping almost as much as it can amid soaring oil prices, decided yesterday to keep its output steady, rejecting suggestions by Venezuela to cut production.
Light sweet crude for July delivery fell 89 cents to $70.40 a barrel on the New York Mercantile Exchange. But Nymex gasoline futures rose amid evidence that demand, which had been flat for weeks, was picking up, and after a Texas refinery was forced to cut output because of a fire caused by lightning.
Qatari Oil Minister Abdullah al-Attiyah told reporters of the decision after OPEC members finished a closed-door session that solidified an informal agreement not to adjust its official output quota of 28 million barrels per day.
Speaking shortly before OPEC's formal meeting, al-Attiyah said the market has more than enough supply but that ``at this price level, OPEC won't cut production."
However, Al-Attiyah cautioned that OPEC could change course by the time it meets in September.
Analysts said the Organization of Petroleum Exporting Countries put aside concerns about rising global inventories of crude and weakening demand growth, at least temporarily, to focus on a more immediate worry: $70-a-barrel oil.
``Most of the members are not comfortable with these prices," said Michael Lynch, president of Winchester-based Strategic Energy and Economic Research. ``They may expect the market to weaken in the second half of the year, but they still feel the price is too high right now for them to cut production."
Medley Global Advisors senior managing director Yasser Elguindi said most OPEC members ``don't want to send any signals to the market that there's a floor at $70."
While high oil prices mean big profits for oil producers in the near term, the longer-term risk is that they could stunt economic growth and energy consumption and spur the development of alternative energy sources.
Venezuelan President Hugo Chavez, a longtime price hawk, suggested trimming production and he repeated calls for OPEC to establish a minimum price of $50 a barrel.
In a speech, he said the price ``ceiling would be infinity."