OPEC informally agree on higher oil output

OPEC members informally agreed on Wednesday to boost daily crude oil production starting in July, according to Saudi oil minister Ali Naimi as reported by AP.

But the Saudi minister declined to give details about the size of such an increase. Analysts have widely expected OPEC would boost its daily output by at least a half million barrels-a move that has not impressed the market where U.S. prices soared to three and half-month high on Tuesday.

Indonesian minister of mines and energy Susilo Bambang Yudhoyono confirmed that the group had reached an agreement at the informal meeting. The OPEC members would meet formally later on the day to make a final decision on the organization's production level.

An increase of 500,000 barrels daily would not significantly add to the flow of crude to the market because it would equal roughly the amount if crude that OPEC's 11 members are already pumping in excess of their official quotas.

Some OPEC sources said that the increase would be about one million barrels a day, a size that could reducer prices of crude oil to between $27 and $28 per barrel.

July contracts for West Texas Intermediate, the U.S. benchmark crude shot up to close at 33.05 on Tuesday after a intraday high of 33.40 despite the oil organization's plan to increase its production level. (*)