OPEC Increases Output Limits
RENEE MONTAGNE, host:
On Wednesdays, our business segment focuses on the workplace, but first, the high cost of a barrel of oil. OPEC oil ministers met today in Vienna and agreed to raise their output quotas by half a million barrels per day. The gesture is unlikely to change the amount of oil that's actually produced by the cartel as NPR's Scott Horsley reports.
SCOTT HORSLEY reporting:
Crude oil prices topped $55 a barrel this week and there's not much OPEC can do about it. Most OPEC members are already pumping as much oil as they can. Editor in Chief Peter Zipf of Platts Oilgram News says raising the quota is a symbolic move intended to calm jittery oil markets.
Mr. PETER ZIPF (Editor in Chief, Platts Oilgram News): Any increase in the ceiling does not mean anything for the supply of oil. What they're also trying to indicate is further assurances that they will supply the crude that the market is asking for.
HORSLEY: While Saudi Arabia could open its taps even wider, Zipf says that additional high sulfur crude is harder to turn into gasoline.
Mr. ZIPF: The amount of crude is not what is putting so much pressure on these prices. It is the ability to take this crude and turn it into refined products.
HORSLEY: Demand for refined products like heating oil is expected to increase later this year. While oil prices may not stay as high as $55 a barrel, few forecasters expect the price to fall below $40 anytime soon.
Scott Horsley, NPR News.