VIENNA (AFP) - OPEC`s decision to expand production capacity will help deal with long-term supply challenges, US Energy Secretary Spencer Abraham said before adding that OPEC ministers had told him they were serious about raising production in the face of a skyrocketing world oil marekt.
"A commitment to begin the process of expansion, to invest in expansion helps to deal with long-term challenges and I think that that`s something that may not have been as much of a priority before so I think that is significant," Abraham told reporters on the sidelines of a conference in Vienna of the UN watchdog Interntional Atomic Energy Agency (IAEA).
The US energy secretary said OPEC ministers had told him "their goal is to reassure the markets that not only is OPEC producing at very high levels but that the decision to try to expand production has been taken seriously."
OPEC`s decision last week to raise its quotas to better reflect its real oil output has left the markets unmoved and looks a failed bid to bring down soaring prices, analysts said.
The Organisation of Petroleum Exporting Countries declared in Vienna last Wednesday that it was lifting its official production ceiling by one million barrels daily to 27 million barrels per day (mbd) from November 1.
The move was welcomed by consumers as a goodwill gesture on the part of the 11-member cartel that pumps about 30 percent of the world`s oil.
Since its members are almost producing at full capacity, the only way to send a soothing message to the market was to bring the quotas closer to its real output, which was raised in July and August in response to record prices.
Oil prices climbed on Monday following news that Russia`s embattled oil giant Yukos has partly suspended deliveries to China and concerns about the impact of hurricanes on US supplies, traders said.
The price of Brent North Sea crude oil for delivery in November rose 20 cents to 42.65 dollars per barrel in early deals in London, the highest level since August 23.