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NEW YORK -- OPEC ministers gathering in Beirut on Thursday are poised to effectively remove all limits on their oil production in a bid to cool global crude prices, reported USA TODAY. The 11-nation cartel is expected to raise its formal production ceiling or temporarily suspend the quota system altogether to pull oil prices down from record highs.
Prices are "clearly too high. It's clearly not acceptable, and we're determined to do whatever we can with other OPEC countries to bring it down," said Adel Al-Jubeir, foreign affairs adviser to Saudi Arabia's royal family.
In New York, crude futures prices fell $2.37 to $39.96 a barrel Wednesday, a 5.6 percent decline that wiped out most of Tuesday's 6 percent spike. Prices touched an all-time high of $42.45 a barrel Tuesday after the second terror attack on Saudi oil facilities in a month.
Crude oil and gasoline prices have climbed on fears of major terror attacks, disruptive assaults on Saudi and Iraqi oil installations, strong demand from China and the United States, and U.S. refining bottlenecks.
OPEC supplies a third of the world's oil. Members are supposed to pump no more than their cartel quotas, but most are thought to cheat by producing more. According to USA TODAY,Saudi Arabia and the United Arab Emirates are believed to be the only members with spare production capacity.
Some industry experts expect OPEC to raise its official daily output ceiling from 23.5 million barrels to 26 million, roughly what analysts say the cartel is already producing. Some OPEC members want to suspend production quotas.
"Everybody should produce what they want over the next few months," Qatari energy minister Abdullah bin Hamad al-Attiyah told Bloomberg News.
Either way, the cartel is producing at close to peak capacity and can do little to add to global energy supplies, said Sarah Emerson, head of petroleum research at Energy Security Analysis in Boston.
"But the perception that OPEC is taking action and is interested in moderating prices generally has a bearish impact (on prices)," Emerson said. "If they do nothing, it sends a message they don't care and they're trying to stick it to consumers. It feeds paranoia."