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Opec quota hike to boost world oil supply by 500,000 bpd

CARACAS: The recent increase in Opec's official production quota by 1.7 million barrels a day will only boost the world's oil supply by some 500,000 (bpd) because members already produce more than they have agreed to, newspapers here reported Saturday, citing Venezuelan Energy Minister Ali Rodriguez.

Rodriguez, who on Monday was elected chairman of the Opec noted that Opec members already have been exceeding the group's total production quota of 23 million barrels per day (bpd) by some 1.2 million barrels.

As a result, much of the 1.7-million-bpd quota hike Ñ 1.2 million bpd of it Ñ will merely make 'legitimate' oil that is already being pumped onto the market, and only 500,000 bpd of it will constitute a boost in actual supply.

A prominent US senator had made the same point earlier in the week, calling the Opec quota increase, which US President Bill Clinton described as a diplomatic achievement, a 'hollow victory'.

Frank Murkowski, chairman of the US Senate Energy Committee, told reporters on Wednesday that he expected any reduction in the retail price of gasoline to be 'a little bump' and short-lived.

"If you subtract the cheating of 1.2 million bpd, you see the actual increase in production at 500,000. It's a very hollow victory. If it's a victory of any consequence, it's a relatively small 500,000 barrels," he said. AFP