OPEC oil exporters are set to raise production by 2 per cent today to curb a price rally, which is stoking fears of inflationary damage to the world economy.
International crude markets reacted calmly to news of OPEC's fourth production rise this year, having already fallen 3 per cent or $1 on Friday on expectations of the move.
Benchmark Brent crude in London yesterday was five cents off at $30.90 a barrel after a delayed start because of transport chaos in Britain. Open-outcry energy trading on London's International Petroleum Exchange didn't start until 11:30 a.m. as the weather delayed traders from making it into work.
Iran, Kuwait, Algeria and Qatar said they would abide by a price stability pact mandating a collective OPEC increase of 500,000 barrels per day.
"Iran will proceed with the earlier decision of OPEC and supply our share of the increase," Iran's OPEC governor, Mr Hossein Kazempour Ardebili, told Reuters in Dubai.
Analysts said the rise was unlikely to make much difference to the volume of physical supply because most members, apart from OPEC kingpin Saudi Arabia, are already pumping flat out.
Already pumping more than at any time in the past 20 years, some OPEC members say global crude supply is already more than sufficient to meet world demand.
Three previous OPEC increases since March were aimed at quelling a relentless rally that has seen the highest prices since the crisis over Iraq's 1990-91 occupation of Kuwait.
Mr Kazempour said Tehran had received notification of action from Venezuela's OPEC president, Mr Ali Rodriguez, to produce the extra oil under the informal price mechanism.
There was no official word from the Vienna headquarters of the Organisation of the Petroleum Exporting Countries or from dominant OPEC power Saudi Arabia, the world's largest oil producer and exporter.
But Mr Rodriguez said on Friday the 10 OPEC nations taking part in output restraint would announce a supply rise of a total 500,000 bpd at midnight last night.
OPEC's action is in line with the informal pact stipulating a hike of 500,000 bpd when the price for a cartel basket of crudes remains above $28 for 20 consecutive working days.
