Opec

VIENNA, Austria -- The Organization of the Petroleum Exporting Countries sought to regain its authority over volatile oil markets yesterday, agreeing to increase production by 500,000 barrels a day. But prices still rose to a record. At the same time, representatives of leading OPEC nations said they feared that a slowing global economy might dampen future demand. The oil cartel signaled that it would be ready to act swiftly to protect its members' interests. The decision by members of the Organization of the Petroleum Exporting Countries came after an unusually long day of arguments about the size and the timing of the increase in production, intended to meet an expected surge in winter consumption and to push prices down.

ATLANTA -- The nation is heading into the winter holiday season with plenty of crude oil but with thinning stores of gasoline and heating oil, the government reported yesterday. Last week, inventories of crude soared by 5.1 million barrels, which gave the nation 5.8 percent more than it had a year ago, according to the federal Energy Information Administration. Gasoline inventories climbed by 1.4 million barrels. Even so, the reserve of gasoline is 0.8 percent less than in November last year.

NEW YORK -- Crude oil rose for a fourth straight day yesterday, trading above $60 a barrel on speculation that OPEC members will agree at a meeting this week to cut production because of a 20 percent drop in prices over the past three months. The Organization of Petroleum Exporting Countries will meet Thursday to discuss reducing output by 1 million barrels a day, oil ministers including Qatar's Abdullah bin Hamad al-Attiyah said. Oil prices fell last week to a 2006 low as U.S. supplies rose to 14 percent above the five-year average.

WASHINGTON - It's a move that anyone outraged by high gasoline prices would applaud - a nonprofit labor group suing the Organization of Petroleum Exporting States (OPEC). That was in 1978, though - and the lawsuit failed. A U.S. appeals court threw it out three years later, noting that OPEC's member states enjoy immunity from prosecution under the Sherman Antitrust Act. Congress recently had a perfect opportunity to change that - and wasted it. In June, the Senate approved an amendment that would have let the federal government sue OPEC.

Although $50-per-barrel oil is getting to feel normal, many U.S. policy-makers and other oil "optimists" still talk about high prices as a temporary spike lasting at most a couple of years. Oil prices, they tell us, are being driven mainly by those gouging Machiavellians at OPEC and are therefore relatively short term. According to the optimists, the same high prices that are filling OPEC's coffers today will encourage other, non-OPEC oil producers, such as Russia or Kazakhstan, to drill more oil wells to cash in on the hot prices.

NEW YORK - Crude oil had its biggest two-day drop since March 2003 as the Organization of the Petroleum Exporting Countries promised yesterday to increase global oil supplies in an effort to prevent high prices from curbing economic growth. Gasoline futures also plummeted as OPEC pledged to boost oil quotas by 2 million barrels a day with a possible increase of 500,000 barrels in August. The move signals that U.S. refiners will have adequate supplies to process into gasoline to meet demand during the summer driving season.

BEIRUT, Lebanon - OPEC ministers said yesterday that they will increase oil production, allowing members to pump at will and bypass the quota system that has governed supplies for most of the past two decades. "Everybody should produce what they want over the next few months," Qatar's energy minister, Abdullah bin Hamad al-Attiyah, said in an interview in Beirut, where OPEC meets tomorrow. "We do not want to see any shortage of supply at all, and we want to avoid shocks." Saudi Arabia, the world's biggest oil exporter, will ensure that markets have enough supply, said the kingdom's oil minister, Ali al-Naimi.

Scrambling to control high oil prices, the Organization of the Petroleum Exporting Countries will meet this weekend in Beirut, Lebanon, before its official conference there Thursday, and might pursue a plan to raise quotas sharply or do away with them entirely, an OPEC spokesman said yesterday. Lifting quotas entirely "could be one of the options" that OPEC considers this weekend, Abdulrahman al-Kheraigi, a spokesman for the 11-nation cartel, said in a telephone interview. "That option might be seriously considered," he said, "but I haven't heard anything official.

NEW YORK - Crude oil futures fell to a three-week low in New York yesterday after the Organization of the Petroleum Exporting Countries' President Purnomo Yusgiantoro said the group may raise its production quotas "significantly" at a meeting in Beirut, Lebanon, Thursday. OPEC, which pumps more than a third of the world's oil, may boost its output targets by more than 2 million barrels a day from the current 23.5 million barrels when the group meets in Beirut, Purnomo said. Saudi Arabia, the world's largest oil exporter, is increasing production and is urging other OPEC members to do the same in an effort to lower prices.

LONDON - The president of the Organization of the Petroleum Exporting Countries said yesterday that there was little the group could do to lower fuel prices soon, because OPEC's oil production quotas were not the main problem. His remarks contradicted statements last week by Saudi Arabia, the cartel's leading producer, calling for increases in the quotas to ease price pressures. Purnomo Yusgiantoro, who is both the cartel's president and the energy minister of Indonesia, said the recent sharp rise in retail prices for gasoline and other fuels was "due to factors beyond OPEC's scope."