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OPEC increases oil output

04 August 2009 14:57 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Crude oil and gasoline surged to seven-week highs as increasing industrial activity bolstered optimism that fuel consumption will rebound, Bloomberg reports.

Oil gained 3.1 percent after reports showed that U.S. manufacturing shrank at the slowest pace in 11 months and factory output in China advanced to the highest level in almost a year. The Standard & Poorâ€™s 500 Index climbed above 1,000 for the first time since November, also boosting optimism that raw- material demand and prices will increase.

Brent crude oil for September settlement gained $1.85, or 2.6 percent, to $73.55 a barrel on Londonâ€™s ICE Futures Europe exchange. It was the highest closing price since Oct. 14.

The Organization of Petroleum Exporting Countries increased oil output for a fourth month in July, with quota compliance slipping as some members took advantage of strong prices, a Bloomberg News survey showed.

OPEC oil output averaged 28.39 million barrels a day last month, up 45,000 from June, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 26.035 million barrels a day, 1.19 million more than their target.

OPEC members have 6.11 million barrels a day of spare production capacity, according to Bloomberg News figures.

he International Energy Agency, OPEC and U.S. Energy Department forecast in reports last month that global oil consumption will decline by more than 1.5 million barrels a day this year, the most since the early 1980s.

U.S. crude-oil inventories increased 1 million barrels last week, according to the median of 11 estimates by analysts in a Bloomberg News survey. Stockpiles climbed 5.15 million barrels in the week ended July 24, the biggest gain since April, an Energy Department report on July 29 showed.

The dollar dropped to the lowest level this year versus the euro, bolstering the appeal of commodities to investors looking for an inflation hedge. The U.S. currency fell 1 percent to $1.4404 per euro from $1.4257 on July 31. It touched $1.4445, the weakest since Dec. 18.