OPEC Set to Raise Oil Output by 500,000 Bbl/Day, Indonesia Says

Indonesia, OPEC's only Asian producer, said all the group's members are ready to agree an oil production increase of at least 500,000 barrels a day at the ministerial meeting next week.

The Organization of Petroleum Exporting Countries agreed in March to boost output by 500,000 barrels a day if its average reference price over 20 days rose above $28 a barrel. The average over the 20 days to June 13 was $28.45 a barrel.

"We'll stick to that agreement,'' said Rachmat Sudibyo, director general of oil and gas at Indonesia's ministry of mines and energy. "This is the basic position of all OPEC members.''

Crude oil prices in London have risen about 27 percent since March to $30.05 a barrel June 13 on concern demand will outstrip supply in the coming months, especially as Northern Hemisphere users stockpile fuel for winter.

OPEC President Ali Rodriguez said yesterday the group has already decided on whether to boost oil output at next week's meeting in Vienna but wouldn't say what the decision is.

OPEC's 11 members pump two of every five barrels of oil in the world and control about 90 percent of known reserves.

The U.S. government has cited higher oil prices as a major factor contributing to concern over inflation and one of the reasons for interest rate increases by the U.S. Federal Reserve.

Nine out of 11 members of OPEC, agreed in March to increase output quotas by 1.452 million barrels a day.

A decision to increase oil output, though, might only benefit some OPEC members as countries like Indonesia, which pumps about 1.3 million barrels a day, is already producing near capacity.

"If OPEC chooses to increase production, then the others will benefit, we cannot participate,'' Rachmat said. (*)