BEIRUT, Lebanon, June 3 (UPI) -- Members of the Organization of Petroleum Exporting Countries agreed to increase oil production by 2 million barrels a day at their meeting in Beirut Thursday in an effort to curb soaring oil prices and prevent world economies from slowing down.
However, the raise in oil quotas of OPEC members, the biggest in more than six years, is unlikely to have a significant impact on oil, which was traded at a record of more than $42 a barrel Tuesday.
The OPEC decision came at a time of growing concerns about securing oil supplies from the Middle East following terrorist attacks targeting oil interests in Saudi Arabia and Iraq.
A statement released at the end of one day's extraordinary parley, the first to be held in Beirut in 32 years, said OPEC's oil production ceiling will be increased to 25.5 million barrels a day as of July 1 and to 26 million barrels at the beginning of August.
OPEC's secretary-general, Indonesia's Minister of Mines and Energy Purnomo Yusgiantoro, was skeptical that the raise in production would do wonders in oil prices.
"Even if our member countries collectively produced at full capacity, this would at best only have a limited impact on prices, since other factors affecting prices are so overwhelming," Yusgiantoro told journalists.
Saudi Oil Minister Ali al-Nuaimi said it bluntly on Wednesday: "OPEC cannot control oil prices."
Yusgiantoro said that the high prices have been caused by a combination of factors over which OPEC has no control, including speculation on futures markets, tightness in the U.S. gasoline market, and geopolitical concerns.
A higher-than-expected growth in oil demand, especially in China and the United States, was cited as another key factor affecting oil prices.
He said the extensive demand for oil by the U.S. and Chinese economies in particular was not anticipated at OPEC's previous meeting in Vienna last March.
"According to our calculations, the international oil market was well-supplied with crude and there was the expectation of an occurrence of the traditional drop in oil demand during the second quarter of the year," Yusgiantoro said.
"Oil prices, however," he added, "have continued to rise during this quarter to levels that have exceeded expectations. ... This is in spite of the market remaining well supplied with crude at all times."
He said OPEC countries were highly alarmed and deeply worried about high oil prices and their possible impact on the world and domestic economies.
"But we can only do so much in the present situation," he stressed, alluding to the latest rise. "As an organization, we are already producing at close to capacity."
The secretary-general of the world's most powerful oil cartel reaffirmed OPEC's standard policy of ensuring a stable oil market at reasonable prices for both producers and consumers.
"Over the years, OPEC has placed ... a premium on achieving order and stability in the market, balancing as much as possible the interests of producers and consumers," Yusgiantoro said. "This was essentially the philosophy behind the introduction of our price band four years ago which balanced reasonable price targets with flexibility. "
He said the OPEC-devised market-stabilization mechanism worked well for a while, "until the present destabilizing factors over which OPEC has no control began to play a disproportionately large role on the market's fortunes."
Oil prices have jumped 25 percent this year and reached a record $42.45 a barrel Tuesday, threatening world economies.
Prices are surging as refining bottlenecks limit gasoline supplies and as concern spreads that Middle East oil fields will be attacked.
The parley's final communiqué said the rise in production aimed at ensuring adequate supply "gives a clear signal of OPEC's commitment to market stability and to maintaining balanced prices."
The conference again called on all other parties, including non-OPEC producers and consumers, "to take appropriate measures to address the challenges facing the industry, including the structural changes."
The increase is the largest since November 1997, when the group increased supplies as Asian economies slid into recession, sending prices to $10 a barrel a year later.
OPEC members are already pumping above their quotas.
The increase in production would leave most members outside of Saudi Arabia pumping at their limits, since taps in OPEC are largely open already.
Saudi Arabia has raised oil output to 9.1 million barrels a day and the United Arab Emirates is boosting production to 2.45 million barrels a day, 400,000 barrels above its OPEC quota, according to UAE Minister Obaid bin Saif al-Nasseri.
OPEC for two decades has allocated production quotas to its members to limit output and regulate the market, but the group has no formal mechanism to enforce its decisions.
Rising violence in the Middle East increased concerns about security in the flow and supply of oil from the region.
Only last week, suspected al-Qaida terrorists attacked the offices of major Western oil companies in eastern Saudi Arabia, killing 22 people, mostly foreigners, including a Briton and an American.
The attack was seen aimed at Saudi Arabia's oil sector, which, if undermined, would affect world economies. The kingdom possesses one-quarter of the world's oil reserves.
Oil pipelines in U.S.-occupied Iraq have been targets of attacks and bombings by suspected Iraqi insurgents.
The 11-member OPEC was founded in 1960 in Baghdad. Its initial role was simply to set prices.
