OPEC raises output, but supply fears remain

As expected, OPEC ministers have raised production quotas by 500,000 barrels per day to 28 million barrels per day.

They also authorized the president of OPEC to raise quotas by another 500,000 barrels per day as soon as next month if prices remain at current levels.

This move at the OPEC meeting in Vienna, however, did little to curb worries over crude oil supplies. Neither did the release of weekly US inventory figures on Wednesday.

Crude oil stockpiles in the US fell by 1.8 million barrels in the week ending June 10. A drop was expected, but inventories were only predicted to drop by 400,000 barrels.

The retreat in supplies was primarily due to acceleration of production by refiners in order to meet demand.

Gasoline inventories were also down, by 900,000 barrels, when they had been expected to increase.

As a result, New York Mercantile Exchange July gasoline futures rose 3 cents to $1.57 per gallon. Distillate inventories were up by 2.5 million barrels, but July delivery heating oil still rose 94 cents to $1.648 per gallon, again on fears of insufficient supplies.

West Texas Intermediate crude oil July contracts rose $1.45 to $56.45 per barrel, while August deliveries of Brent on the International Petroleum Exchange were up $1.09 to $55.93 per barrel.

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