OPEC to boost production to combat rising oil prices

OPEC agreed today to raise its production ceiling by two million barrels-a-day next month in a bid to bring down uncomfortably high prices of crude oil.

The oil cartel, meeting in Beirut, also agreed to raise the target by an additional 500,000 barrels a day in August if necessary.

“We have decided to lift the ceiling to 25.5 (million barrels-a-day), effective July 1 and 26.0 (million barrels-a-day) effective August 1, and we will meet to review future action on July 21 in Vienna,” Saudi Oil Minister Ali Naimi said.

The decision by OPEC representatives in the Lebanese capital was a compromise between members led by influential Saudi Arabia, who were seeking an immediate hike in production of 2.5 million barrels-a-day to reach a ceiling of 26 million barrels-a-day, and other producers, such as Iran, who preferred to raise the ceiling in at least two stages.

“We believe there is not any shortage in the market and we should be very careful about the coming months,” said Iranian Oil Minister Bijan Namdar Zangeneh.