Oil production hike to take effect, exporters say

The 12 nations comprising the powerful Organization of Petroleum Exporting Countries (OPEC) have recently concurred to make the daily oil output higher by half million barrels, starting November, to address issues of growing need for the said commodity. The oil exporters are pressed to come up with such drastic measure in order to hit the oil requirements of countries worldwide. The recent spate of oil price hike was seen as a big contributory factor to the exporters' landmark decision.

OPEC member-countries, which include Indonesia, Algeria, Iraq, Iran, Nigeria, Libya, Qatar, United Arab Emirates, Saudi Arabia, Venezuela, and Kuwait, arrived at a bold move after studying Saudi Arabia's proposition. Saudi Arabia holds a firm clout among the members of the influential group of oil exporters.

Abdullah al-Badri, OPEC secretary general, explained that the group's decision is focused on letting oil consumers realize that oil exporters care about them.

Concerns regarding the jittery equilibrium between oil supply and demand have resulted in steep oil price tags, at times reaching historical proportions. However, even after the oil exporters' group announced the news, the US light crude still surged by 74 cents at $78.23. It is just 54 cents lower than this year's highest recorded price of $78.77.

The International Energy Agency, comprised of the 26 biggest oil consuming countries, have earlier expressed the necessity for oil exporters to effect a higher oil production in order to address the equally high demands for the product.

Meanwhile, the said development has generated mixed responses from experts. John Hall, an analyst working for John Hall Associates, said that the oil exporters' decision is a highly positive move. Moreover, it is expected to alleviate the US economic and stock market woes, which has affected countries around the world. Others, like Addison Armstrong of TFS Energy Futures, also expressed concern about the issue. He said that the oil exporters might flood the global market with too many barrels when there is actually no need for such excess supplies.