OPEC decided today to increase its official output by one million barrels per day from November 1, Iranian Oil Minister Bijan Namdar Zangeneh and his Algerian counterpart Chakib Khelil said in Vienna today.
'We have decided to raise the quota by one million barrels per day from November 1,' Khelil said at the close of the cartel's ministerial meeting.
Zangeneh said the increase to 27 million barrels a day was meant as a signal to the oil market that the cartel plans to maintain its current output. 'OPEC is producing two million barrels over the official ceiling. Now we have legitimised half of it,' he said.
The minister added that the cartel believed the market was well-supplied and the quota was largely a sign of goodwill towards petroluem consumers.
Saudi Arabian Oil Minister Ali al-Nuaimi said the quota hike was decided upon 'to narrow the gap between the real production of 28 million barrels per day. Instead of being at 26 we will be at 27.'
OPEC has for the past two months been exceeding its quota in response to record prices driven by terror fears and rising demand in China. According to market sources, the 10 OPEC members in the quota system have since August already been pumping at least two million barrels per day above the current ceiling.
Nuaimi said the new quota would only come into effect in November as producers had already allocated their output for October.
OPEC president Purnomo Yusgiantoro said the cartel hoped the quota increase would bring down the price of the OPEC basket of seven crude oils to around $30 from current levels of about $38.
OPEC also decided today to keep its price band steady at $22-28 dollars a barrel, according to Saudi Arabia's Nuaimi. But Zangeneh said the 11-member cartel was likely to take another look at the matter at its next meeting, which will take place in Cairo on December 6.
He said the members were expecting feed-back from a panel of experts who have been studying changing the band, which has been at $22-28 since it was created in March 2000.
