The Organisation of Petroleum Exporting Countries (OPEC) yesterday agreed to raise its formal production quotas by an additional 500,000 barrels per day (bpd) to 28mn bpd. The cartel also authorised its president Ahmad Al Fahd Al Sabah to start consultations on a further 500,000 bpd increase within next few weeks, if oil prices continue to remain high.
However, oil markets were not impressed with OPEC's announcements. OPEC's increase in output quota only legitimises the actual output of its members, which are already operating at well above their individual quotas. OPEC had yesterday stressed that the problem lies with the capacity of the refineries and not with oil production. OPEC had advised building up of refinery capacities, to contain rising oil prices.