OPEC expected to boost production
Vienna, Austria OPEC is expected to raise its daily output quota by half a million barrels when it meets later this week, though analysts said the move would have little impact on oil prices — an opinion that appeared to be verified by a $2-a-barrel surge on Monday.
The anticipated increase would bring the official quota to 28 million barrels per day — a symbolic gesture, analysts said, since the cartel is already pumping that much. Including Iraq, which is not bound by the official quota, OPEC’s daily output was 29.3 million barrels a day in May, according to the International Energy Agency.
The Organization of Petroleum Exporting Countries produces enough crude oil to meet about 35 percent of daily demand, which is about 82.5 million barrels a day now and is forecast to average more than 84 million barrels a day for the year.
Analysts say the underlying reason for today’s high prices is not a shortage of oil, but rather the petroleum industry’s limited excess production capacity, which leaves only a limited supply cushion in the event of an unexpected disruption.
The war in Iraq, labor unrest in Nigeria and political uncertainty in Russia and Venezuela have made oil traders uneasy for about two years. Rising demand, particularly in China and the United States, have also contributed to the market’s nervousness.
Gasoline prices rise slightly
Washington, D.C. The retail price of gasoline rose by more than a penny last week to average $2.13 a gallon nationwide, the Energy Department reported Monday.
The weekly government survey said the average price nationwide of regular-grade gasoline increased by 1.4 cent to $2.13 per gallon, or 4.5 cents a gallon higher than the same time a year ago.
Pump prices were highest on the West Coast, averaging $2.306 a gallon, and cheapest in the Gulf Coast, where motorists paid on average $2.044 a gallon. In the Midwest, gas averaged $2.082 per gallon.
One of the key factors underpinning the current price of gasoline is the high cost of oil — the result of strong demand, tight global supplies and geopolitical uncertainties.
Light sweet crude for July delivery rose $2.08 to $55.62 per barrel Monday on the New York Mercantile Exchange. Oil prices are roughly 48 percent higher than a year ago.
No verdict yet in Scrushy trial
Birmingham, Ala. Jurors in the corporate fraud trial of former HealthSouth Corp. chief Richard Scrushy deliberated a 13th day Monday without reaching a verdict on charges he led a $2.7 billion accounting fraud.
The jury previously has sent notes to the judge stating members were deadlocked on all 36 counts against Scrushy. But there were no messages as the panel returned from a four-day break.
The panel resumes deliberations Tuesday morning.
Scrushy is the first chief executive accused of violating the Sarbanes-Oxley law, passed in 2002 to tighten corporate reporting rules following a series of business scandals.