RIYADH, Feb 2: The die was cast even before Opec had met in Vienna on Friday. Reports from all around were not at all conducive for the oil cartel to open the taps any further - as demanded by the major global powers and crude consumers.

Global economy is slowly and surely dipping into a recession. No one contests that crude consumption is directly related to the health -or ill health – and the state of the global economy.

US economic concerns were definitely renewed after the Labour Department reported on Friday, as the ministers met at their headquarter in Vienna, that employers cut 17,000 jobs in January - the first monthly decline in more than four years and a fresh sign that the economy is in danger of stalling.

”These poor job data are the strongest evidence so far that economic expansion is grinding to a halt,” said Peter Morici, a professor at the University of Maryland School of Business. “The economy is in recession mode.”

The job loss data came on top of additional bad news on Thursday, when the US government said consumer spending rose in December by just 0.2 per cent, the weakest performance since June, and claims for unemployment benefits in the United States jumped by 69,000 last week, more than three times what economists had expected.

Construction spending in the United States, meanwhile, also fell by a sharper-than-expected 1.1 per cent in December, reflecting the woes in the country’s housing market.

To top it all, the week’s inventory report from the U.S. Energy Department’s Energy Information Administration also showed that crude and gasoline stocks rose 3.6 million barrels each during the week ending January 25, buttressing Opec arguments of adequate supply.

Economic fears thus eclipsed any concern over continued Opec production limits. Markets also did not miss the indications. Hence despite the decision of the Opec not to increase production, markets largely remained indifferent.

Oil dropped 3 per cent on Friday as fresh signs of weakening U.S. economic growth overshadowed Opec’s decision to maintain its output cuts. The U.S. crude lost $2.79 to settle at $88.96 a barrel, dropping 3.04 per cent.

London Brent crude fell $2.77 to settle at $89.44.

In the meantime, the Opec also expects the world oil demand in the second quarter to average 85.61 million barrels per day, around 1.7 million barrels less than in the first quarter.

For the Opec not to take all the above into consideration before reaching a decision could not have been possible and practical. The Opec focus during the Vienna moot on Friday was thus on near-term expectations: the likelihood of less demand as the Western hemisphere’s heating season ends and before its summer driving season begins; the prospect of more barrels both from Opec and non-Opec nations; and fears that the market will shrivel if economic woes worsen.

”In view of the current situation, coupled with the projected economic slowdown the current Opec production is sufficient to meet expected demand for the first quarter of the year,” said a statement summing up Friday’s meeting of Opec oil ministers.

In fact there is a humming all around that if global economic woes persist, Opec may be forced to cut its output even further when its meets again on March 5. That is definitely on the cards, analysts say.

News reports are already signalling that the mood within the Opec in Vienna was to cut production levels when they meet next.