Saudis act to bring oil prices down quickly

LONDON — Saudi Arabia is taking the lead to quickly lower the price of oil.

The Organization of the Petroleum Exporting Countries lifted production by just over three percent to 26.2 million barrels a day for 10 members, excluding sanctions-bound Iraq.

Saudi officials said they have recruited support within OPEC for an oil production hike of 1 million barrels a day. The proposal was discussed at the cartel's meeting in Vienna on Sunday and OPEC subsequently agreed to raise oil supplies by 800,000 barrels daily in a bid to tame runaway crude prices and avert a consumer scare over fuel costs.

OPEC's increase should help quell an international outcry over gasoline prices and ease concerns that high energy bills might accelerate inflation and dent world economic growth. The pact is effective from October 1.

Currently, the OPEC production ceiling is 25.4 million barrels a day. Officials said Saudi Arabia wants to bring the price of oil to $25 a barrel and has already pumped an additional 600,000 barrels a day since July.

Already, the Saudi proposal has its detractors. Kuwait said it wants to approve a hike of no more than 655,000 barrels a day.

The Saudi lead came as oil prices broke the $35 a barrel barrier. On Friday, the price of oil dropped to $33.60.

Industry analysts said OPEC can simply not keep up with rising oil demand. Shortages have been reported in the United States and throughout Europe.