Reuters reported that oil demand in wealthy countries has not improved much and the patchy state of global recovery could prompt OPEC to keep output steady at its next meeting.

Mr Nobuo Tanaka ED of International Energy Agency said that high distillate stocks in the Organization for Economic Cooperation and Development, the group of 30 rich nations, underscored the sluggish rebound in those economies, since diesel is a key indicator of industrial activity.

He said that "We are concerned that economic recovery expectations are very high. While that is true in China and India, in OECD countries like Europe and Japan, we have not seen much of an actual recovery in oil demand."

As a result, the high oil and fuel stockpiles could stay OPEC's hand. OECD inventories are very high and OPEC's concern is the global economic recovery, so if the economies recover in a robust manner, they will have to produce more. If not, just simply adding to the stock levels does not make any sense.

(Sourced from Reuters)