ABU DHABI (Dow Jones)--The Organization of Petroleum Exporting Countries opted Wednesday to hold current oil production steady and review market conditions in January as it surveys global economic growth and energy demand.
The decision, which immediately sent oil prices higher, is a rebuff to large oil consuming nations that have lobbied the cartel to offer more oil to global markets in a bid to ensure crude prices don't once again test triple-digit territory.
The head of Libya's oil industry Shokri Ghanem confirmed the decision, which came quickly after a meeting of OPEC ministers began in Abu Dhabi. The meeting remains underway.
OPEC last met Sept. 11 in Vienna and agreed to raise oil output by 500,000 million barrels a day in a bid to meet buoyant demand and rein in high prices.
Instead, crude futures have soared in the weeks since then, prompting OPEC officials and analysts alike to predict just a week ago that the group might decide to add at least another half million barrels to the market now to help drag oil prices away from $100 a barrel and avoid any additional threat to demand, a view that gained additional traction among some officials at the meeting here.
In the end, the cartel, which provides 40% of global oil needs, opted to defer any output policy decision to January, when it will have a better window on winter demand in the U.S. and the outlook for oil prices.
"I don't think the issue is raising production...because that's not going to have an impact on prices," said Chakib Khelil, Algeria's oil minister, who takes over as OPEC President on Jan. 1.
The year-end position often seems difficult for OPEC given members' concerns over potential price declines during the lull between winter and summer.
Khelil said the last time the cartel tried to deliver a political gesture to raise output and reassure oil markets, it didn't work.
"Last time we did a gesture that didn't really have relations with the real demand, you saw what happened-prices remained very high," he said.
Oil prices immediately moved higher after the decision.
After see-sawing in volatile trade, light sweet crude for January delivery shot up $1.07 on the New York Mercantile Exchange, to $88.39 a barrel.
In deciding to stick to current production levels, the pressure to increase supply is likely to persist. Oil traders now predict that oil prices will remain high into next year, amid a shortage of worldwide excess capacity.