MercoPress. South Atlantic News Agency

OPEC agrees to half a million bpd oil production hike

Oil hits new record on supply concerns

The Organization of Petroleum Exporting Countries (OPEC) agreed to increase oil production by 500.000 barrels per day from November first, Qatar's Energy Minister announced at the 145th OPEC session Tuesday in Vienna.

Analysts called the increase insignificant, but said it was a gesture of goodwill by the 12 nation-cartel to try and calm global oil prices, which have been closing on record highs in recent weeks. The decision was a proposal from influential member Saudi Arabia, in spite of opposition from Venezuela, Iran, Iraq, Kuwait, Libya and Nigeria. But despite OPEC's decision US light crude settled at a record closing price of 78.23, up 74 US cents. This mark is just below the all-time high of $78.77 recorded earlier this year while Brent crude closed 90 cents higher at $76.38 in London. Until Tuesday, OPEC ministers had insisted there would be no increase in supplies. This was despite warnings from the International Energy Agency, which represents the world's top 26 oil consuming nations, that additional supplies were needed to meet demand. "Our message to the consumer is that we care," OPEC's secretary general Abdullah al-Badri said, explaining the background to the decision. Experts have suggested that an increase in OPEC supplies, and the likely result that prices will eventually fall, would help ease recent US economic and global stock market jitters. But there are also concerns that the market could be oversupplied should any weakening of the US economy reduce demand for oil. OPEC which supplies more than a third of the world's oil is already exceeding its set daily quotas by 900.000 barrels.