OPEC chief says group could boost oil output by 15 percent if necessary

LONDON — Demands for an increase in OPEC oil output intensified Wednesday, as crude prices rose from already high levels despite the group’s efforts to reassure markets against a possible shortfall in supply.

Senior British and European Union officials called on the Organization of Petroleum Exporting Countries, supplier of one-third of the world’s oil, to boost output further or risk throttling economic growth.

“Oil now presents a real and emerging risk to the global economy,” said Ed Balls, chief economic adviser at Britain’s Treasury.

“We are concerned about the adverse effects on the world economy of the recent sharp rise in the world oil price,” he told the Foreign Press Association.

OPEC president Purnomo Yusgiantoro said earlier that OPEC is already producing 25.5 million barrels a day, or 2 million barrels above its official output target. It could raise its actual production “if necessary” by up to 15 percent, or an additional 3.8 million barrels, he told reporters on the sidelines of an investment conference in London.

Purnomo was hoping to calm a market agitated by unexpectedly strong demand for crude and fears about instability in the Middle East. U.S. oil prices have soared above $40 a barrel, and many analysts predict even higher prices when demand for gasoline rises this summer.

Although prices fell at first on Purnomo’s comments, they recovered and shot higher later in the day.

“This week we will be consulting with OPEC on the recent rise in oil prices and urging them to raise oil production to meet world demand at the prices they themselves have said are sustainable,” Treasury chief Gordon Brown told a House of Lords committee.

Several, if not all, of OPEC’s members were expected to gather for emergency talks Saturday during an energy forum in Amsterdam, and Purnomo said he hoped they would discuss a Saudi proposal for OPEC to raise its output target by 1.5 million barrels. Saudi Arabia is the only group member with significant additional capacity.

The European Union’s energy commissioner, Loyola de Palacio, told reporters in Brussels that OPEC risks losing credibility if it refuses to boost output during these talks.

“A decision must be taken to raise oil production,” said de Palacio, who also will attend the forum in the Dutch capital.

However, Purnomo said that any agreement to change the OPEC target would require the approval of all the group’s members, and an official at OPEC’s headquarters in Vienna said that some members might not attend the Amsterdam talks.

Regardless of what happens this weekend, a formal decision to raise the production target would have to wait until all of OPEC’s 11 members meet formally on June 3 in Beirut, the OPEC official said, speaking on condition of anonymity.

OPEC members blame speculators and geopolitical jitters for much of the strength in prices, and many insist there is no physical shortage of crude.