OPEC Agrees to Increase Output Quotas

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he OPEC oil cartel on Thursday agreed to raise output limits next month by 2 million barrels a day, or 8.5%, the biggest increase in more than six years.

The cartel also promised to add an additional 500,000 barrels a day in August, Bloomberg said.

The official details are unlikely to make a lot of difference to actual supplies from the cartel because its output already is at or above official new quota limits, Reuters reported.

Oil prices have jumped 25% this year and reached a record $42.45 a barrel this week in New York, a level that German Chancellor Gerhard Schroeder said threatens world economic growth, Bloomberg reported.

Saudi Arabia and the United Arab Emirates, the only two countries with significant spare capacity, have already started delivering additional volumes, Reuters said.

Members considered two proposals, one an increase in quotas of 1 million to 1.5 million barrels a day, and a second for a boost of 2 million to 2.5 million barrels a day. Iran and Venezuela had lobbied for an increase at the lower level, Bloomberg reported.

The cartel is next scheduled to meet on July 21.

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