by Leigh Thomas
ISFAHAN, Iran - OPEC ministers decided Wednesday to raise their production ceiling from 27 to 27.5 million barrels per day with immediate effect and held out the possibility of a further rise of 500,000 bpd in May, ministers said.
"The first increase (is) now," Kuwaiti Energy Minister and OPEC President Sheikh Ahmad Fahd al-Sabah said.
"The second increase is in the hands of the president" of the cartel, he said, adding it will "depend on the prices".
Libyan Energy Secretary Fathi Hamed ben Shatwan said OPEC will "hold consultations in April and will apply it in May if it`s needed."
Saudi Arabia, the world`s largest producer and cartel kingpin, had warned that it could go it alone to boost output if it failed to win over sceptical OPEC members of the need to bring prices back down from near-record highs and meet what it predicts will be increased demand in the later half of the year.
Saudi Oil Minister Ali al-Nuaimi said he would prefer to see prices to fall from the 55 dollar mark to between 40 and 50 dollars a barrel.
He told the al-Hayat newspaper that the Saudi push "shows our interest not to inflict damage on economic growth, developing countries and market stability".
But Shatwan said OPEC was only "raising the ceiling because it`s already produced" -- a reference to estimates that OPEC`s real actual output is around 29 million bpd.
Oil prices have been robust ahead of the meeting -- hovering just below the record 55.67 dollars reached last October 25 -- amid forecasts of robust global energy demand and questions over the ability of OPEC or the Saudis to put a break on the price rally through their statements.
The most recent oil price rises have come in the wake of a report last week from the International Energy Agency that raised forecasts for global oil demand this year.
Most OPEC ministers -- who in March usually mull cutting output due to warming weather in the northern hemisphere -- believe enough oil is currently being produced, and have asserted they can do little to calm a bullish market.
03/16/2005 10:49 GMT