Opec meeting likely to maintain status quo

For all that anyone seems to know, I'd have as much luck predicting the outcome of this week's Opec meeting by grabbing a daisy and yanking off its petals one by one - production increase, production decrease or staying the same - as I would listening to analysts or even representatives of member nations.

So, since the general sense seems to be that no-one is sure what will happen, I've consulted the lone daisy that I could find and am going out on a limb to predict production is staying the same.

Petal number one: oil prices that are staying above the $100 per barrel mark. Last week oil topped the $100 mark and then went on to hit $103.05 - the high water, or oil, mark since trading was launched in 1983.

Now, the general sentiment seems to be that oil is going to stabilise around that $100 mark. After all prices remained at that level for all of last week, and started out this week the same way. And while there is ongoing buzz that oil prices should drop as the economy slows in the United States, it hasn't happened yet.

Which leads me into petal number two: market fundamentals just don't seem to be that fundamental anymore.

Since early last year, analysts and Opec have been steadily talking about how there isn't anything in the market that justifies the current price of oil. But after a year of steadily booming prices, I think that fear - whether rational or not - is what is really driving the market.

Stockpiles of gasoline and crude are rising in the US, we're heading into a traditional lull between the winter and summer high seasons and demand is slowing alongside the US economy, but still those prices are high. So, the fear factor comes in as petal number three.

Geopolitical woes from Venezuela, which is embroiled in a particularly nasty international spat with Exxon, to Russia, where February oil exports plummeted to their lowest level since 2004, are taking their toll on oil prices. Political and social unrest in fellow oil-producing nations Iran and Nigeria have only made appearances more grim.

Petal number four is a single person: Opec President Chakib Khelil, who is also Algeria's energy minister. Despite taking the middle ground in an official statement which hemmed and hawed with a noncommittal "either we hold [output] steady or we cut in order to restore market balance and stability," he told the press in Vienna that "I assume things are going to be as it is."

It seems to be a pretty clear statement, or at least as clear as we're going to get before the meeting.

That Khelil would say this, despite Iran and Venezuela pounding the drums and calling for a production cut, is telling.

Iran and Venezuela have spent the weeks running up Opec's meeting trying their best to scare the star-spangled pants off of US President George Bush, who's been pleading fruitlessly for the organisation to increase production. Although both countries are citing those poor market fundamentals as the reason to cut production, Venezuelan leader Hugo Chavez and Iran's Mahmoud Ahmadinejad are well known for their bluster and their dislike of the US, which fears another economic blow if there is less oil in the market.

With Libya's acting Oil Minister Chukri Ganem telling the Associated Press that "I think we won't do anything if prices stay at this level," I think Chavez and Ahmadinejad are not going to be able to push Opec into a cut.

So now I'm out of petals (hey, it was a small flower), but you get the general idea - I think we're staying put.

- The writer is a freelance journalist based in Alaska, USA.