OPEC to Increase Production; Analysts Downplay Impact

Click here to write a Letter to the Editor.

he OPEC oil cartel on Wednesday announced an increase in production by 1 million barrels a day to 27 million on Nov. 1, but analysts said the decision would be unlikely to have any major impact on high oil prices, news services reported.

The total would be the highest on record for the 10 members outside of Iraq, which has no limit. The price of oil has been above OPEC's price range for nine months and reached a record $49.40 a barrel on Aug. 20 in New York.

Saudi Oil Minister Ali Naimi told reporters Wednesday that any increases by OPEC of its quota would "legalize" its current overproduction, Reuters said.

The group's oil output including Iraq rose 360,000 barrels a day to an average of 29.92 million a day in August, at a 25-year high for a second month, Bloomberg reported. The 10 members with quotas pumped 28.1 million barrels a day.

Oil prices have soared in recent months because of the extremely thin margin of spare output capacity worldwide and fears of supply disruptions around the globe, AP reported.

OPEC said it would meet next on Dec. 6 and would reconsider proposals to increase its price target of $22 to $28 a barrel, Bloomberg reported.