(Reuters)
Updated: 2007-12-05 19:57

London - Oil rose on Wednesday after OPEC decided to keep output levels unchanged, rebuffing consumer country calls for more crude to rein in prices now near $90 a barrel.

The Organization of Petroleum Exporting Countries also agreed to meet again at the end of January to review its decision ahead of a regular March gathering, Nigerian Oil Minister Odein Ajumogobia told Reuters.

US crude was up 50 cents to $88.82 a barrel at 0956 GMT. London Brent crude rose 49 cents to $90.02 a barrel, after ending above US oil for the first time since August 23 on Monday.

Oil prices have fallen about 10 percent since peaking at $99.29 on November 21, and analysts questioned whether OPEC holding off on increasing output would lift prices again.

"Little fundamentally has changed...the sell-off appears to be driven by financial players underscoring the notion that it's not physical shortages of OPEC crude oil that drove prices to near $100 in the first place," said Jan Stuart, an economist with UBS Investment Research.

The unfolding implications of the subprime mortgage crisis and its impact on the wider economy are expected to hit demand growth in the United States, the world's largest energy consumer.

Traders said the release of US inventory data on Wednesday will give further price direction. Last week showed a build in stocks at the Cushing, Oklahoma hub that is the delivery point for US crude futures.

A poll of analysts by Reuters ahead of Wednesday's US inventory data showed crude stockpiles probably fell 800,000 barrels in the week to November 30. Distillate stocks were seen down 300,000 barrels.

Tensions between Tehran and Washington had also supported the record rally that sent prices up 40 percent from August to late November.

But a report released on Tuesday that grouped the findings of various US intelligence agencies contradicted the Bush administration's earlier assertion that Tehran was intent on developing a bomb.