OPEC president Sheikh Ahmed Fahd al-Sabah said today that the cartel will increase oil output by 500,000 barrels per day (bpd) in May to meet growth in demand and calm supply fears.
'In May, there'll be an increase in production, because growth in demand in the third quarter will dictate an increase in production,' Sheikh Ahmed, Kuwait's oil minister, said.
OPEC members - minus Iraq - will raise their output by 500,000 bpd for the third quarter to 28.8 million bpd, Sheikh Ahmed said, adding that producers will closely monitor the market to ensure there is no oversupply.
OPEC ministers raised output by 500,000 bpd when they met in the Iranian city of Isfahan last month to 27.5 million barrels and authorised the cartel's chief to call for another similar increase if needed.
Almost all members of the Organisation of Petroleum Exporting Countries are, however, producing well in excess of the official ceiling to the point that actual output on the market is already above 28 million bpd.
Kuwait is pumping to full capacity of 2.6 million bpd, up on its official quota of under 2.2 million bpd, while Algeria is exceeding its quota of 800,000 bpd by half a million bpd.
Oil prices reversed early falls to climb this evening, despite the OPEC news. New York's main contract, light sweet crude for delivery in May, rose 31 cents to $50.80 a barrel in electronic deals.
In London, the price of Brent North Sea crude oil for delivery in June rose 34 cents to $51.27 a barrel.
OPEC said in its monthly oil market report, released on Friday, that rising oil production should help calm the world oil market but structural problems remain that could support high prices.
