OPEC is set to raise its formal oil output ceiling to reflect actual supply when it meets on September 15th, a senior OPEC official based in the Middle East said today.
He declined to specify the volume of the increase, but implied it would be about 1.5 million barrels per day (bpd), the amount the cartel is now pumping beyond its formal 26 million bpd ceiling.
"OPEC will raise its ceiling in Vienna, but the new production level will be decided at the meeting," he told Reuters. "The increase will allow the official ceiling of OPEC to reflect actual production of members."
He reckoned the 10 OPEC producers bound by quotas are now pumping "almost at full blast" at 27.5 million bpd.
Delegates in the Organisation of the Petroleum Exporting Countries have suggested the cartel could raise its official ceiling by one to two million bpd.
But even as producers pump close to flat out to meet rocketing demand growth, oil prices remain some 30 per cent higher than at the start of the year. US oil prices have, however, shed $7 from record highs of $49.40 hit on August 20th.
The official ruled out taking a last step towards deflating prices by suspending OPEC's production ceiling.
"OPEC's quotas should not be lifted. Producing without quotas is out of the question," he said. "Such a step will create a state of chaos."
The cartel, which controls nearly half the world's crude exports, has no control over high oil prices, which are being driven by surging world demand for petroleum and political instability in the Gulf, he said.