The members of the oil producers’ cartel, OPEC, have agreed to increase production to offset high prices. Meeting in the Iranian city of Isfahan, oil ministers decided on a two percent hike in supply. The move has been advocated by Saudi Arabia for some time but other members who have already been pumping at levels above their national ceilings resisted.
OPEC’s decision should rein in prices which have shot up nearly 20 percent in the past five weeks to around 55 dollars a barrel. But analysts believe any relief will only be temporary. Demand for fuel is expected to remain high, fed by China’s rapidly expanding economy. That means extra supplies could be used up very quickly.