OPEC agrees to keep output quota unchanged at 28 million barrels

OPEC said Monday it has agreed in principle to keep an official output quota for 10 of its 11 members unchanged at a ceiling of 28 million barrels per day, Kyodo News reported.

Sheikh Ahmad al-Fahd al-Sabah, president of the Organization of Petroleum Exporting Countries, unveiled the plan after the first day of OPEC's two-day plenary session.

The quota excludes volatile output from Iraq.

OPEC is expected to release a statement Tuesday making its spare output of 2 million barrels available to consumer countries when needed in a market short of gasoline and other refined products, industry observers say.

The latest accord fell short of expectations in some consumer countries that OPEC would agree to raise the ceiling by 500,000 barrels or more, freeing them from rising fuel costs.

Oil prices hit a record $70.85 a barrel in late August after Hurricane Katrina pounded oil facilities in the Gulf of Mexico at a time when strong demand from China, the United States and others has been putting upward pressure on the prices.

But at the OPEC session, many delegates opposed the proposed ceiling hike, asserting the recent surge in oil prices has stemmed from the shortage of refining capacity.

The delegates also asserted that an adequate volume of crude has been supplied to the market.

Benchmark crude futures prices surged more than $4 to $67.39 on the New York Mercantile Exchange in the wake of the accord to keep the ceiling intact.

The Paris-based International Energy Agency estimates that OPEC members have a combined output of more than 29 million barrels per day.

Some experts say that OPEC members are running their oil production facilities at full capacity, except for Saudi Arabia and some other members.

Therefore, if OPEC raises the ceiling from the current 28 million barrels, their spare output capacity would be nearly eliminated, they say. (*)