The Organisation of the Petroleum Exporting Countries (Opec) backed away yesterday from an immediate increase in oil output, falling short of expectations in some consumer nations for quick relief from high fuel costs.
Opec neared a deal to make available spare production, but only when needed in a world market short of refined product, rather than OPEC crude, ministers said.
"We will collectively make a pledge to have the spare capacity available if needed, but I don't believe it is needed," said Nigerian oil minister Edmund Daukoru.
Opec is likely to agree a resolution today that would vow to release its spare two million barrels a day should it be required, said Opec president Sheikh Ahmad al-Fahd al-Sabah.
Official output quotas for 10 member countries would be kept unchanged at a ceiling of 28 million barrels per day (bpd), he said.
"We have the two million available if there is a call for it - there is no need for raising the ceiling," Sheikh Ahmad said.
Oil prices had eased from a record $70.85 (€58.31) a barrel in the three weeks since Hurricane Katrina hit US Gulf oil facilities.
But crude rebounded sharply yesterday, rising $3.95 to $66.95 a barrel as another tropical storm threatened the region.
Analysts said Opec was treading a fine line between reassuring consumer countries that spare capacity is readily available, without forcing unnecessary supply on to the market.
"Opec wants to be perceived as part of the solution, not part of the problem," said consultant Yasser Elguindi of Medley Global Advisors.
Europe, rather than the United States, has led calls for more oil from Opec, even though there appears to be no way it can sell more to refiners.
Opec had considered the option of lifting output by 500,000 bpd to 28.5 million with a further 500,000 bpd increase at the discretion of the group's president.
But several Opec ministers said they were opposed to higher output quotas when global refining capacity is at full stretch and unable to process more crude.
Katrina's assault on US Gulf refineries has left nearly 900,000 barrels a day, about a tenth of US refining plant, offline in the world's biggest consumer.
