OPEC Decides To Increase Output

OPEC, the oil cartel responsible for 40% of world oil export, has announced today it has decided to increase oil output to meet rising demand, to the shock of analysts around the world.

The 12-nation cartel, set up to regulate international oil prices and economic stability, decided to increase production from later this year to account for 500,000 additional barrels every day, despite widespread expectations that supply would remain constant.

With oil demand skyrocketing from India and China, and power outages in the US leading to significantly lower output, international oil has been a premium of late, with prices nursing the $80/barrel mark for sometime now.

Until the decision, OPEC had always maintained that supply was not responsible for the price rises, giving analysts the implication that supply would remain constant for the foreseeable future.

In spite of this, the International Energy Agency which represents the 26 leading oil consumers called for an increase in output in order to bring prices back to a naturally sustainable level for the benefit of the global economy as a whole.

However, with more oil set to be flooding the market from November of this year, prices will look to return to a more stable and sustainable figure, allowing economic growth to pick up in the wake of falling fuel costs.

The proposal was said to have come from Saudi Arabia, a highly influential voice at the OPEC table, in order to stabilise the price of fuel on world markets. Despite the news, oil price closed at a record high of $78.23 on the day.

The news was well received on global stock exchanges, which all saw positive trading as a result of today’s announcement, with oil set to at least reduce some of the instability currently plaguing world economies.

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