OPEC Agrees to Raise Production Quotas

PEC ministers Wednesday agreed to boost crude oil output levels by 500,000 barrels a day to 28 million, Bloomberg reported.

The cartel, which met in Vienna, Austria, said it would have the authority to seek more increases as needed, with another quota level rise later this year, Bloomberg said.

Meanwhile, OPEC's president said that a "reasonable" level for oil would be between $30 and $50 a barrel, Bloomberg reported.

President Bush in a speech Wednesday promoting his energy bill, said the United States needs to boost its oil-refining capacity and should simplify the permitting process for new refineries.

The president said he backed finding alternative sources to diesel and gasoline, including biodiesel and ethanol, "to replace foreign sources of oil."

The latest estimates from OPEC are that its member nations already are pumping about 30 million barrels a day, including from quota-exempt Iraq, near a 25-year high, Reuters reported.

OPEC, which supplies about 40% of the world's oil, wants to lower oil prices to prevent a further weakening of the world economy, which would in turn dampen oil demand, Bloomberg said.

Cartel officials also said Wednesday they would adopt a new oil-price index, using one representative oil from each of its 11 members, Bloomberg said.

The new index, effective immediately, would replace benchakers in New York and London, which represent better quality crude and sell for more money.