OSAKA, Sept 18: Opec reached an agreement in principle on Wednesday to keep oil production levels at the current level, a key official said, after Baghdad’s decision to allow UN weapons inspectors back into Iraq.

Asked late Wednesday whether an agreement in principle to leave production levels unchanged had been reached, Kuwait’s acting oil minister Sheikh Ahmad Fahad Al-Ahmad Al-Sabah said “yes”.

He had just completed an informal meeting with his counterparts from Saudi Arabia, Qatar, and Algeria, ahead of Thursday’s Opec meeting which will formally announce crude oil production quotas for the rest of 2002.

Al-Sabah declined further comment.

Sources close to Opec added that another meeting of the 11-member cartel could take place before the Muslim holy month of Ramadan in November.

Ministers from the Organization of Petroleum Exporting Countries (Opec) had said they would focus on market fundamentals, adding there were enough global oil stocks to satisfy world demand and the coming northern-hemisphere winter.

Any decision to adjust output and shore-up flagging global economies had depended on Saudi Arabia which dominates the cartel with the world’s largest oil reserves.

Opec had been under intense pressure to increase oil production by up to 1.8 million barrels of oil a day after prices broke $30 a barrel for the first time in 18 months in August amid fears of a US-led war on Iraq.

Some 21.7 million barrels a day are currently produced.

Saudi Arabia had considered a production increase to ensure oil prices remained between the “fair and reasonable” target of $22 to 28 a barrel despite opposition from Indonesia, Qatar, Kuwait and Venezuela.

Reference Brent North Sea crude for November delivery was down 67 cents a barrel in late London trade at $27.85 in response but prices were again on the rise in Asian trade on Wednesday.

Al-Sabah earlier argued there was enough oil in global stocks and there was no need to increase production.

He said the market had felt the impact of Iraq.

Opec is cautious about the situation in Iraq and will decide to make no change in order to wait and see Iraq’s impact on oil prices, said Morio Horiguchi, an oil analyst at Nomura Research Institute.

Indonesia’s Minister of Mines and Energy, Purnomo Yusgiantoro, told reporters that Middle East politics was behind the oil price spike.

We believe that there is enough crude on the market, he said.

Qatar’s energy minister Abdullah bin Hamad Al-Attiyah had also indicated oil production could remain unchanged but declined to say whether an agreement in principle had been reached.

Asked whether Qater’s position was any different to Saudi Arabia’s, he replied: I did not feel any different position.—AFP