OPEC is poised to increase oil output at a meeting this weekend, although it will probably not go as far as some members wanted. The cartel is due to hold a special meeting in Vienna on Sunday, at which members are expected to approve an increase of 1-1.5 million barrels per day, according to analysts. A number of members had been pushing for a hike of two million barrels to offset the pressure on crude oil prices due to the ongoing strike in Venezuela and the continued build up of US military forces on the borders with Iraq.
Non-OPEC member Russia has increased its oil output in recent weeks, but analysts say that its capacity to influence prices is limited. At 0830 in London, crude oil was trading down 6c at USD28.88 per barrel. Prices have weakened over the past week in anticipation of an OPEC output hike, but remain well above the USD28 level. Yesterday, chief UN weapons inspector Hans Blix reported that his teams had found no "smoking guns" in Iraq, although he said the inspectors were not receiving full support from Baghdad. Adding to the upward pressure on crude oil, the US said it remains convinced that Saddam Hussein is concealing weapons. //www.fxcentre.com