“We have enough stocks in the market,” said Abdalla El-Badri, Opec’s secretary-general in Abu Dhabi, at a production meeting on 5 December. “There is no reason for the price of oil to go to $100 a barrel.”

A final communique, from a meeting of Opec’s oil ministers in Abu Dhabi, said the group would keep output unchanged as the world was “well supplied” and crude reserves were at comfortable levels.

Investment bank Barclays Capital says it believes the movement of oil below $90 a barrel this week acted as the key swing factor in Opec’s decision, making the achievement of a consensus not to increase output stay put a far smoother process than it would have otherwise been.

However, it said an output increase of 750,000-1 million barrels a day would have been required to allow the market to return to normal seasonal swings following four consecutive quarters of tightening.
“In this context, and barring extremely negative economic outcomes, we see plenty of scope for prices to move back up and new highs to be tested,” says the bank.

After trading at an all-time high of $99.29 on 21 November, crude was steady at about $88.50 late on 5 December.