‘The March allocations don’t appear to have been cut,’ says Barclays Capital’sKevin Norrish. ‘But given the fundamentals they don’t need to cut very much to keep the market pretty tight.’

In effect, the lack of action following the 10 February announcement implies that producers are exercising the principle of deterrence. A brief hush settled on the market as the US exchange closed for Presidents’ Day on 16 February and short-term speculators stood back from the action. All eyes were focused on OPEC’s trigger finger. In London, benchmark Brent crude held firm at $34.40 a barrel on 18 February.

The stand-off followed a brief slanging match between the US and leading OPEC producer Saudi Arabia, after US Treasury Secretary John Snow warned that any reduction in output would be ‘regrettable’ and an effective tax on US consumers.

Saudi daily Al-Riyadh responded by accusing Washington of using OPEC as a scapegoat for its own economic failings and of ‘waging an open war against oil producers’.

The impasse is likely to continue for several weeks. Statements from a number of OPEC members that the proposed 1 April output cut could still be reversed have kept traders in suspense. Although by then the end of the northern hemisphere winter will ease pressure on world inventories, this will to some extent be compensated in the US by the start of the driving season.

Data released by the US Energy Information Administration in mid-February shows that crude stocks have fallen to 268.9 million barrels, although this is only 3.6 million barrels lower than the same period a year ago.