The Organization of Petroleum Exporting Countries (OPEC) sought to reassure edgy oil markets yesterday that crude supplies are plentiful as another storm whipped up fears that hurricane-ravaged refineries along the battered US Gulf Coast could take a new hit.
OPEC President Sheik Ahmed Fahd al-Ahmed al-Sabah said the group was close to agreement on making available 2 million extra barrels of oil a day -- a move aimed at easing jitters over an expected spike in demand as the winter heating season approaches in the northern hemisphere.
Oil ministers, who spent Monday discussing the Organization of Petroleum Exporting Countries' long-range strategy, were deciding yesterday whether to offer the extra oil or boost the output ceiling of 28 million barrels a day by 500,000 barrels.
But both options were seen as largely symbolic. The cartel already is pumping about 28.5 million barrels a day, and making extra crude available would not change the fact that the world's refineries can't keep up with demand.
"There is no need for new oil on the market," said Iran's acting oil minister, Kazem Vaziri.
Prices soared back above US$67 a barrel -- a jump of more than US$4 -- on Monday as Tropical Storm Rita gained strength. Heating oil surged more than US$0.20 a gallon (3.8 liters), while gasoline rose nearly US$0.26 a gallon.
Crude for October delivery was trading yesterday at US$66.60, down US$0.79.
But Rita was expected to further strengthen to a hurricane with the potential to inflict more damage on US refineries hit by Hurricane Katrina.
Sheik Ahmed, who is also Kuwait's oil minister, said most members backed the proposal to offer 2 million extra barrels of oil a day, and that the 2 percent increase in the production ceiling also might be approved.
With Rita bearing down on the key US oil producing region, "everyone will be very keen to help the market," he said.
"I'm always concerned about these types of things," Saudi Oil Minister Ali Naimi said. "We've said volatility in the market isn't a benefit to the producer and the consumer."
Even so, Katrina was "only a blip for the market" over the long term, he said.
The 2 million barrels would come from the spare capacity of OPEC members, although Saudi Arabia is the only country able to provide significant extra crude. Kuwait and the United Arab Emirates also could contribute.
Naimi said the oil-rich kingdom has the capacity to immediately raise its oil production from around 9.5 million barrels a day to 11 million barrels a day if needed.
"The crude is available," Naimi said. "If you want it, there it is."
He said OPEC's aim was to "show good intent" and to emphasize that oil was available at a time when the markets are worried about supply disruptions.
"We really can't afford to lose more production," said Phil Flynn, an analyst at Alaron Trading Corp in Chicago.
"The market is much more focused on Rita," Flynn said. "OPEC is kind of secondary concern to the market. OPEC is already pumping as much as they can, so raising or not raising the ceiling is not going to make a difference."