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OPEC, the Organization of Petroleum Exporting Countries, has decided to keep crude production at current levels, but will intervene if prices fall after the cold winter spell in the northern hemisphere.
OPEC oil ministers say there is no need to cut production quotas, officially set at 27 million barrels per day, because global oil supply is currently exceeding demand.
World oil prices have risen sharply in recent weeks hovering near $50 a barrel, well above the OPEC target band of $22 and $28 a barrel.
OPEC recognizes that the price band, established in 2000, is now unrealistic, and has suspended it pending further study.
Analyst Ehsan Ul-Haq of PVM oil in Vienna says OPEC members will have a reserve plan to cut production, if demand falls off too dramatically in the spring.
But Mr. Ul-Haq says the market remains nervous that instability in Iraq could affect oil supplies.
"Iraq has not been able to export from its northern outlet to the Turkish border, because insurgents attacked once again the oil infrastructure, and from the south they are exporting less than in the past few months," he explained. "So, more Iraqi oil companies said they have to decrease oil exports by 10 percent until June, because of technical problems."
OPEC ministers will meet again in mid-March in Iran to review prices and production.
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