VIENNA, 2 February 2008 — The Organization of the Petroleum Exporting Countries (OPEC) yesterday kept oil supplies unchanged at 29.67 million barrels and began a debate about whether or not an output cut is needed in March to defend prices against a drop in demand.

OPEC rejected an appeal from Washington for more oil to lower fuel bills and bolster its slowing economy.

Petroleum and Mineral Resources Minister Ali Al-Naimi said he would have pushed for an output increase if it were needed but that global supply and demand were in balance. “The condition of the market is sound currently, supply and demand are equal and global reserves are fine,” Al-Naimi said.

US crude traded up 15 cents at $91.90 a barrel yesterday.

“No surprise with this decision,” said analyst Simon Wardell at Global Insight. “I think the instinct is to cut, but with a meeting next month they were always likely to wait until then to make the cut they believe is needed.”

Venezuela and Iran already are suggesting OPEC may need to consider an output cut at the group’s March 5 meeting to put a floor under prices.

“Maybe, maybe. We have to be very careful and keep a close watch on inventories,” said Venezuelan Oil Minister Rafael Ramirez.

Al-Naimi said Riyadh now was pumping at 9.2 million barrels daily, well in excess of its OPEC allocation of 8.94 million bpd. During a six-year rally, OPEC has often said it was powerless to influence oil prices, blaming speculators for a bull run that took crude over $100 a barrel in early January.

Driven by rising Chinese demand and with global growth of some five percent, the world economy proved able to cope with inflated fuel prices. As growth slows, oil markets will be watching closely to see how far OPEC goes with supply curbs to prop up prices.

Many in the 13-member organization are of the view that oil plays no part in a downturn led by the US housing market crisis and the resulting credit crunch.

“A lot depends on what signal they want to send to the markets in general,” said analyst Mike Wittner. “They don’t want to be perceived as the bad guy, I don’t think they want to be perceived as making it worse. But what caused the slowdown? The slowdown was caused by the subprime issues... It was not about oil prices.”