LONDON, Jan 29: Opec, whose members together pump 40 per cent of the world’s oil, will very likely maintain output levels at a meeting in Vienna on Friday as crude prices slide on fears of a US recession, analysts said.

They said the balance of opinion favours the status quo, with few members ready to countenance any increase in production, as called for by US President George W. Bush recently.

At the same time, reducing output does not seem a viable option at the moment although some producers are unhappy at the prospect of less revenue as prices fall.

“We believe they are unlikely to hike output amid the threat to oil demand growth, rising US inventories and sub-$90 a barrel oil prices,” said Sucden oil analyst Nimit Khamar.

President Bush, during a visit to the Middle East earlier this month, urged the 13-member Organisation of Petroleum Exporting Countries to increase output to help bring down prices, which soared to a record high above $100 a barrel at the start of January.

However since then, worries that recession may strike the world’s largest economy and so undercut global demand for crude, have sent oil prices tumbling.

Falling prices mean fewer petro-dollars for Opec, which could result in the cartel even deciding on Friday to cut output to keep income high, according to the Centre for Global Energy Studies.

“The Organisation’s member-countries have become dependent on the soaring oil revenues of recent years and are likely to seek to defend them in the face of a weakening global economy by cutting production to maintain prices,” CGES said in its January report.

Most traders, however, believe that energy ministers from Opec which is led by the world’s biggest oil producer Saudi Arabia will agree to freeze production levels amid nervousness across global financial markets.

“It would be very surprising if Opec raises production with all the uncertainties on the economy and on demand,” said Bill Farren-Price, an analyst at Medley Global Advisors.

The group’s official daily output ceiling stands at 29.67 million barrels, with only Iraq not part of the quota system.

Opec’s gathering is an ‘extraordinary’ meeting that was scheduled at its last official get together on Dec 5 in Abu Dhabi.—AFP