OPEC set to discuss output boost in Vienna

OPEC will discuss Wednesday hiking official output quotas for the first time since 2007, as it seeks to aid the struggling global economic recovery and compensate for slashed Libyan output. OPEC can pump more oil "if the market needs" it, Angolan Oil Minister Jose Botelho de Vasconcelos told reporters in Vienna on the eve of the gathering. The intergovernmental group, which accounts for an estimated 40 percent of global oil supplies, will make its latest announcement after a regular meeting of its 12 member nations in Vienna, where the cartel is based. OPEC has held its production target at 24.84 million barrels per day (mbpd) since January 2009, but the cartel is pumping above that limit to compensate for lost supplies from Libya, which has been rocked by violent unrest. Consumer nations have called on OPEC to pump more crude amid concerns that current high oil prices with Brent oil holding stubbornly above $100 per barrel could derail the fragile global economic recovery. Brent crude has soared by about 21 percent in value since the start of this year, as traders fretted over the impact of spreading unrest in the oil-rich Middle East and North Africa region. Unrest in OPEC member Libya, which erupted in February, has removed about 1.3 million barrels per day from the global oil market. And world oil prices now appear set to rise even further in the coming months due to seasonal energy demand, which would spark a major tightening in the market. Saudi oil officials, backed by Gulf producers such as Kuwait and the UAE, are pressing for an increase of up to 1.5 million barrels a day, despite resistance from hawks Venezuela, Iraq and Iran which holds the rotating OPEC presidency. Analysts argue that an increase of this size would be roughly equivalent to the cartel's current excess output, leaving overall production unchanged. At the same time, deep divisions have emerged between OPEC member states over Libya, which is nevertheless due to send a delegation to Wednesday's meet. Qatar recognises Libya's opposition National Transitional Council, pledging to help the rebels export oil, while the UAE took part in NATO operations against Libyan leader Colonel Moamer Kadhafi. Kuwait has meanwhile promised large financial support for the rebels. Libya was producing 1.4 million barrels a day before the unrest but its output has since almost ground to a halt. The International Energy Agency, the energy monitoring and strategy arm of the developed economies, has warned that high oil prices threaten global growth and spoke of an "urgent need" for more crude. "As global demand for oil increases seasonally from May to August, there is a clear, urgent need for additional supplies ... to prevent a further tightening of the market," the IEA had said last month.