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Opec agrees to raise oil output | Opec agrees to raise oil output |
(9 minutes later) | |
Opec members have agreed to increase oil production by 500,000 barrels a day to meet concerns about rising demand. | Opec members have agreed to increase oil production by 500,000 barrels a day to meet concerns about rising demand. |
The 12-nation oil producers' cartel agreed to support a proposal from influential member Saudi Arabia to raise daily production from 1 November. | The 12-nation oil producers' cartel agreed to support a proposal from influential member Saudi Arabia to raise daily production from 1 November. |
Oil prices have been touching record highs on fears of a growing imbalance between supply and demand. | Oil prices have been touching record highs on fears of a growing imbalance between supply and demand. |
US light crude rose above $78 a barrel, near its $78.77 all-time high, after Opec's decision but then eased. | US light crude rose above $78 a barrel, near its $78.77 all-time high, after Opec's decision but then eased. |
Timing questioned | Timing questioned |
In afternoon trading, it was up a cent at $77.50 while Brent crude rose 23 cents to $75.71 in London. | In afternoon trading, it was up a cent at $77.50 while Brent crude rose 23 cents to $75.71 in London. |
Until Tuesday, Opec ministers had insisted there would be no increase in supplies. | Until Tuesday, Opec ministers had insisted there would be no increase in supplies. |
The risk of a global economic slowdown means that Opec might be releasing more barrels onto the market just when they are not needed Addison Armstrong, TFS Energy Futures | The risk of a global economic slowdown means that Opec might be releasing more barrels onto the market just when they are not needed Addison Armstrong, TFS Energy Futures |
This was despite warnings from the International Energy Agency, which represents the world's top 26 oil consuming nations, that additional supplies were needed to meet demand. | This was despite warnings from the International Energy Agency, which represents the world's top 26 oil consuming nations, that additional supplies were needed to meet demand. |
Reports suggested the Saudis were concerned that persistently high prices would hurt demand for oil in the short term. | |
Experts have suggested that an increase in Opec supplies, and the likely result that prices will fall, would help ease recent US economic and global stock market jitters. | |
"It is a very positive gesture," said John Hall, an analyst with oil firm John Hall Associates. | |
But there are also concerns that the market could be oversupplied should any weakening of the US economy reduce demand for oil. | But there are also concerns that the market could be oversupplied should any weakening of the US economy reduce demand for oil. |
"The risk of a global economic slowdown means that Opec might be releasing more barrels onto the market just when they are not needed," said Addison Armstrong, an analyst with TFS Energy Futures. | "The risk of a global economic slowdown means that Opec might be releasing more barrels onto the market just when they are not needed," said Addison Armstrong, an analyst with TFS Energy Futures. |
Opec, which supplies more than a third of the world's oil, is already exceeding its set daily quotas by 900,000 barrels. | |
Recent upward pressure on prices has been caused by a series of attacks in Mexico as well as concerns over the impact of hurricanes on oil infrastructure in the Gulf of Mexico. | Recent upward pressure on prices has been caused by a series of attacks in Mexico as well as concerns over the impact of hurricanes on oil infrastructure in the Gulf of Mexico. |
The dozen or so attacks on Mexico oil and gas facilities have been blamed on a left-wing rebel group. |