OPEC Agrees to Boost Crude Oil Output

Source: AP

VIENNA, Austria (AP) -- OPEC sought to reassure jittery oil markets Tuesday by agreeing to boost crude production by 500,000 barrels a day -- a move the cartel conceded was prompted partly by "clouds on the horizon" from the U.S. housing slump.

The Organization of Petroleum Exporting Countries said the higher output would begin Nov. 1. It pledged to "vigilantly monitor" the other factors buffeting crude markets, including worries that supplies might not keep pace with higher demand later this year as it becomes winter in the Northern Hemisphere.

In the recent past, OPEC has raised only its official output quota -- and because it tends to pump over those targets, the increases were purely cosmetic.

"Our message to the consumer is that we care," said Abdalla Salem El-Badri, OPEC's secretary general.

"We are concerned, and that is why we increased production," he said.

After OPEC's announcement, light, sweet crude for October delivery immediately advanced above $78 a barrel on the New York Mercantile Exchange. By the end of an up and down session, it rose 74 cents to settle at $78.23 a barrel, besting the previous record, set July 31, by 2 cents.

Read more: http://biz.yahoo.com/ap/070911/opec_meeting.html?.v=17

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Oh boy... that oughta send prices crashing. What? They went up? Oh that's right, that's not enough. And I love the comment by Abdalla Salem El-Badri - "Our message to the consumer is that we care"....


:rofl:

I'm not sure they can.

They're already pumping all out. There will be no extra oil. Iraq's production is dropping by the day.

This is just a "feel-good" statement.

The Ghawar oil field has been declining. There is no way Saudi Arabia can increase production. They're lucky to be pumping as much as they are right now.

Ain't happening.

over the past five or six years, have they said they would do this - yet nothing more comes of it?

Hot air blowing, that's all.

...because the Dollar is so weak now!

I mean, think back, when Bush was sElected, Oil was about $32.00 per Barrel, <http://www.imf.org/external/pubs/ft/oil/2000/> but the Dollar was nearly twice as valuable then too, compared to what it's worth now!

In November 2000, the Dollar/Euro exchange rate was something like $1.36/$.78, almost the exact opposite of what it is now!

Now it's something like $0.72/$1.38!

<http://newsvote.bbc.co.uk/2/shared/fds/hi/business/market_data/currency/12/13/twelve_month.stm>

<http://newsvote.bbc.co.uk/2/shared/fds/hi/business/market_data/currency/13/12/twelve_month.stm>

And the British Pound, which is over $2.00 now, was below $1.50 back then!

<http://news.bbc.co.uk/2/hi/business/903236.stm>

<http://news.bbc.co.uk/2/hi/business/1373713.stm>

I doubt that they would make this statement without being able to deliver, but all predictions (outside of cooked-book gov sources) suggest they cannot. This is the first test of months of speculation - an eye on the numbers and a bit of memory are called for.

"Our message to the consumer is that we care about making money."