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. Last Updated: 07/27/2016

OPEC Moves to Allay Market's Fears

KUWAIT CITY -- OPEC, supplier of 40 percent of the world's oil, said it would keep output unchanged to avoid "scaring" the market as Northern Hemisphere temperatures fall and the commodity trades near $60 per barrel.

"As we get closer to the second quarter of 2006, that may warrant action of a different kind to the keep the market in balance," said Ali Naimi, oil minister for Saudi Arabia, the biggest producer in OPEC, as the cartel met on Monday. "In this meeting we are leaving things as they are."

The Organization of Petroleum Exporting Countries offered in September to produce as much oil as necessary after prices soared to a record $70.85 per barrel in New York after Hurricane Katrina made landfall on the U.S. Gulf Coast. The offer will expire on Dec. 31 because the output is not required to meet winter demand and will be set aside for emergencies, OPEC president Sheik Fahd Al Ahmed Al Sabah said in Kuwait City.

"I don't think that's consequential," said Michael Rothman, an analyst at International Strategy & Investment and a former oil strategist at Merrill Lynch. "The market is rallying on the fact that they're talking about another meeting to potentially cut."

Oil has rebounded more than 6 percent since slipping from the record, to as low as $55.40, because of concern the United States may have a colder-than-normal winter. It traded at $59.69 per barrel at 1 p.m. Kuwait time.

A decline in OPEC's index of oil prices, last at $52.94 per barrel, may prompt a cut in oil production, delegates said. "If prices fall to $40, $45 a barrel for the OPEC basket, then we may need to act," Libyan Energy Secretary Fathi Ben Shatwan said.

"I think the price is still high; the winter has started, it looks like it will be a cooler winter," the group's president, Al Sabah, said. OPEC will meet again in January or February to review the decision, he said.