OPEC hike in output symbolic

VIENNA, Austria — OPEC will increase its oil production target by 1 million barrels a day later this year in a move widely viewed as more symbolic than significant, given that the cartel has been exceeding the new output limit since the beginning of the year.

The decision was a consensus of the 11 members of the group and will take effect Nov. 1, said Indonesia’s Purnomo Yusgiantoro, president of the Organization of Petroleum Exporting Countries.

“It’s a gesture of goodwill to the consumers that we want lower prices,” Algerian Oil Minister Chakib Khelil said.

OPEC will raise its self-imposed output limit for all its members, except Iraq, from 26 million barrels a day to 27 million barrels. But the cartel, which accounts for one-third of the world’s oil supply, is already producing 27.4 million barrels a day.

“It’s a PR exercise to prove to the consumer that OPEC actually likes them, ” said Leo Drollas, chief economist at the London-based Center for Global Energy Studies. “It’s not going to help the market at all.”

Crude prices in New York and London climbed to record highs earlier this summer, but have eased in recent weeks. In trading Wednesday afternoon, U.S. crude futures fell 81 cents to settle at $43.58 a barrel on the New York Mercantile Exchange. It had reached an all-time high of $48.70 on Aug. 19.

Some countries, including Nigeria and Libya, had sought an increase in the price band for its basket of crudes, currently at $22 to $28, along with the higher production targets.