As crude oil prices rose over $78 a barrel, the Financial Times reports how OPEC is offering a small production increase in an effort to cool the rising prices and reassure industrialised countries. The upward trend towards $80 a barrel has increased the pressure on the cartel to act.
Abdalla el-Badri, Opec secretary general, said the current oil price was “a problem and we will discuss what we can do.” Mohammed al-Aleem, Kuwait’s acting oil minister, on Monday said that oil producers had a relationship with consumer countries. “We have to take care of them as they are taking care of us,” he said.
The largely symbolic increase under discussion, in the range of about 500,000-1m barrels a day, could simply formalise the oil cartel’s current oil production, which is above its official limits, rather than adding extra barrels to the market.
Negotiations were continuing in Vienna amid support from Gulf producers, such as Saudi Arabia and Iraq, and strong opposition from price hawks Venezuela and Iran. A final decision is expected later today.
Sam Bodman, US secretary of energy, said he had phoned ministers from the oil cartel and asked them to pump more oil. “I have encouraged them to increase their supplies,” Mr Bodman said. “They heard. They were courteous.”