However, oil prices fell after the outcome of the late March meeting in Vienna was announced, in part because traders believe the cut will be introduced slowly, and partly because of growing US oil stocks, the figures for which were released earlier in the day. The OPEC 10 - excluding quota-exempted Iraq - is already estimated to be producing about 1 million b/d over its output ceiling, which before the cut was 24.5 million b/d. The oil price on 31 March closed at $33.23 a barrel of benchmark Brent crude.

Whatever the reality of implementing oil cuts, the decision will have done nothing to lessen the dispute between OPEC and consumers. The White House did not directly criticise the organisation but said: 'It is important for producers not to take actions that hurt our economy.'

Analysts say the increased price environment reflects a series of structural shifts that took place in the late 1990s. According to Barclays Capital Research, these include the decision of producers to increase oil revenues to help meet the needs created by growing populations, unexpectedly supportive market fundamentals and falling flexibility of the US refining system.

Much will now depend on the demand outlook for the coming year: according to a Barclays Capital report published on 31 March, US demand is now running 284,000 b/d higher than a year ago and is likely to increase in April - it could even surpass 9 million b/d for the first time ever. The growth, indicative of an improving global consumption picture, could keep non-OPEC production from eating into the organisation's market share, allowing it to maintain its price-defending output constrictions.