March 6 (Bloomberg) -- OPEC's decision to maintain oil output quotas will lead to a bigger-than-average increase in inventories in the second quarter as demand weakens, according to Dresdner Kleinwort Group Ltd.

The 13-nation Organization of Petroleum Exporting Countries yesterday decided to leave production targets unchanged because oil is trading at $100 a barrel. OPEC, which pumps more than 40 percent of the world's oil, has typically cut second-quarter output to guard against a seasonal drop in demand.

OPEC's ruling will lead to ``a global inventory stock-build in the second quarter that is far greater than normal for this time of year,'' Dresdner analyst Gareth Lewis-Davies said today in a report.

Dresdner estimates the so-called ``call on OPEC'' -- an estimate of how much oil the group needs to produce to balance global markets -- will fall by about 1.45 million barrels a day in the second quarter to 30.95 million barrels a day, principally because of lower fuel demand at the end of the Northern Hemisphere's winter.

If OPEC maintains supply, as agreed at yesterday's meeting in Vienna, it will produce about 31.91 million barrels a day, according to Dresdner. That would cause stockpiles to increase by about 960,000 barrels a day in the second quarter, compared with a drop of 580,000 barrels a day in the first.

Oil at Record

After OPEC announced its decision, oil prices in New York closed at a record and have risen to a new high of $105.96 a barrel today.

``Under normal circumstances,'' an increase in inventories would push oil prices down, Dresdner said, indicating that prices aren't reacting to supply and demand.

``Fundamentals remain insufficiently important in price formation to offset the upward price pressure from increased money flow into commodities resulting from dollar and inflation hedging,'' according to the bank's report.

The International Energy Agency, an adviser to 27 industrialized nations, cut its forecast for 2008 global oil demand last month because of the slowing U.S. economy.

The agency reduced its estimate by 200,000 barrels a day to 87.6 million barrels a day. That lowers the annual growth rate to 1.9 percent, down from 2.3 percent forecast in January.

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net

Last Updated: March 6, 2008 11:45 EST