OPEC hopes its agreement boost production by 1.5 million barrels a day will reassure markets roiled by a shortfall in Venezuelan exports and the possibility of war in Iraq.
OPEC voted yesterday to increase production 6.5% to 24.5-million barrels a day. It is trying to push oil prices back below its maximum price target of $28 a barrel. Crude prices were about $30 a barrel on Friday.
The additional crude should bring some modest relief to truckers in the U.S., who have seen diesel prices rise an average of 11 cents a gallon between December 16 and January 7.
OPEC said it wanted to calm fears of a supply crunch caused by an ongoing general strike in Venezuela, which began December 2.
OPEC's new production ceiling will be shared among 10 members, but not Iraq. Although Iraq is a member, it doesn't participate in the group's production agreements because the United Nations oversees its exports under sanctions dating to the 1991 Persian Gulf War.
OPEC agreed just a month ago to cut production by up to 1.7 million barrels a day.