KUWAIT CITY: Gulf monarchies are becoming more pragmatic in their oil policy, increasingly basing it on market fundamentals rather than seeking to appease their Western allies, analysts said on Thursday.

Saudi Arabia, the world’s biggest oil exporter, the United Arab Emirates, Kuwait and Qatar on Wednesday joined other Opec members in deciding to maintain their crude output, drawing strong criticism from the White House.

“He (President George Bush) would have liked Opec to have made a different decision. He is disappointed that they decided not to increase production,” White House spokeswoman Dana Perino said.

Bush “does not think it’s a good idea for their biggest customers, such as the United States, to have an economic slowdown, in part because of high gas prices,” she said.

The Gulf states, which account for almost half of Opec’s current production of 29.67 million barrels a day, had been perceived as the moderate voice in the Organisation of Petroleum Exporting Countries that echoed appeals by the world’s biggest consumers.

“Gulf states have become more pragmatic in their oil policy which is no longer based on political considerations. I don’t think this will affect US-Gulf relations,” Saudi economist Abulwahab Abu-Dahesh said.

“Oil market fundamentals are dictating exactly the opposite of what the US president has asked for... Oil prices are no longer determined by supply and demand alone,” Abu-Dahesh said.

OPEC, which produces 40 per cent of the world’s oil, said after deciding to keep output unchanged at a meeting in Vienna that it was supplying consumers with enough crude and insisted it was not responsible for rocketing prices.

Kuwaiti oil analyst Kamel al-Harami said he believed that Gulf states were no longer capable of convincing their OPEC partners of something that is not supported by market data.

“The US is not willing to read market figures correctly. US gasoline stocks, for example, have reached their highest level in 14 years and US inventories have risen for six consecutive weeks,” Harami said.

The Department of Energy said on Wednesday that US crude inventories tumbled by 3.1 million barrels last week, the first weekly drop for one and a half months.

“High oil prices are not because of tighter supply. It is more because of the weak dollar, speculations and financial markets interference in the oil market. Opec can do little here,” Harami said.

Ahead of the Opec meeting, President Bush, whose country is the world’s biggest energy consumer, said that it would be a “mistake” for Opec not to hike production because it could trigger an economic slowdown.

“Based on fundamentals and logic, actually Opec should have cut production because of a seasonal ease in demand in the second quarter. They maintained output despite an excess of crude in the market,” Harami said.

The price of oil surged past $105 per barrel for the first time on Thursday, with New York’s main oil contract, light sweet crude for delivery in April, hitting $105.10 in London trade.Abu-Dahesh said he believed that Opec can in fact do little to increase output because “all of its 13 members are producing to almost their full sustainable capacity”.

“The United States is aware that Opec’s — including Gulf — decision was purely technical and based on accurate data. Moreover, Opec’s influence on oil prices has greatly diminished in recent months,” he said.—AFP