The OPEC oil cartel decided on Thursday in Caracas to maintain its crude output at a 25-year high of 28 million barrels a day(bpd), despite pumping close to its maximum production capacity amid soaring oil prices.

The decision was announced by OPEC President Edmund Daukoru in the Venezuelan capital after a closed-door session of the Organization of Petroleum Exporting Countries (OPEC) members, who had made an informal agreement earlier that the official output quota of 28 million barrels per day would not be adjusted.

An OPEC statement issued after the meeting said that oil ministers from the 11-member organization had agreed that oil markets were "oversupplied and overpriced," but the production quota was kept unchanged because crude prices are "high and volatile."

Oil producers could still act to adjust production later if necessary, said Daukoru, who is also Nigeria's oil minister, on the sidelines of the 141st special OPEC ministerial meeting.

"We are not comfortable with prices at such levels, because they are not supported by fundamentals, and contain the seeds of new volatility," said Daukoru.

"Our primary objective is to help stabilize the market. We would hate to do anything that exacerbates the current volatility, " he added.

Analysts say OPEC dismisses concerns about rising inventories of crude oil and weakening demand growth, as most of OPEC members feel that the current oil price is too high for them to cut production. They believe that the oil cartel has recognized that a cut in production would probably push oil prices higher and slow demand for its fuel, which might potentially jeopardize the world economy as a whole.

Iran's standoff with the West over its nuclear program, along with refinery bottlenecks and supply problems in Iraq and Nigeria, have been major factors in the global oil price spike.

The OPEC oil ministers met as Iran, OPEC's second-largest producer following Saudi Arabia, rejected U.S. demands that it suspend uranium enrichment as condition for direct talks.

Iran cannot agree with the condition, said Iranian oil minister Kazem Vaziri-Hamaneh in Caracas, while welcoming the idea of direct talks.

He said that Iran had the right "to achieve scientific development and to encourage enrichment."

Venezuelan President Hugo Chavez said in a speech that there was an excess of oil on the market.

He said 50 dollars a barrel was fair but there should not be a ceiling for the price of oil.

Venezuelan Oil Minister Rafael Ramirez said after the meeting there had not been any decisions to increase or cut oil production, acknowledging that OPEC did not adopt Venezuela's suggestion of a production cut.

The Venezuelan oil minister said earlier on Monday that Venezuela favored a cut in OPEC's oil production to restore the balance of the international oil markets, as the levels of oil inventories were above their historical averages.

According to the timetable of OPEC, which pumps about 40 percent of the world's crude, the next two quota review meetings are scheduled for Sept. 11 in Vienna, Austria, and Dec. 14 in Abuja, Nigeria.

Source: Xinhua