OPEC's credibility as a force with enough clout to bring down stubbornly high oil prices was on the line Tuesday as oil ministers began arriving for a key meeting on whether to change production levels.
The Organization of Petroleum Exporting Countries - beset by prices hovering around US$55 a barrel - is expected to raise its daily output ceiling by 500,000 barrels to an official quota of 28 million barrels per day when it meets Wednesday.
But some officials and industry analysts can't help but wonder: What's the point?
OPEC, which churns out 40 percent of the world's crude, is already pumping roughly 30 million barrels a day, meaning the move would be largely symbolic - and unlikely to drive down prices that are bedeviling motorists at the gas pumps and putting the brakes on the global economy.
"No matter what the decision - half a million (barrels), 1 million or 2 million a day - it will have no physical impact on OPEC's output level. It will be just playing with numbers," Iranian Oil Minister Bijan Namdar Zanganeh said Monday.
"This is a crazy market. I don't know what to make of it," said Libya's oil minister, Fathi bin Shatwan. "Raising the ceiling is OK, but really, most are producing at full capacity and cannot produce more."
Saudi Oil Minister Ali Naimi said Tuesday he wants the 11-nation cartel to chew down the price per barrel below the psychologically important threshold of US$50 - "that is what is reasonable worldwide," he said.
On Tuesday, light, sweet crude for July fell 38 cents to US$55.24 a barrel in electronic trading on the New York Mercantile Exchange. On the International Petroleum Exchange, July Brent fell 39 cents to US$54.39 a barrel.
OPEC contends that is sees the most benefit from prices in the US$40 to US$50 range. The group has no interest in seeing prices plummet, but also wants to keep buyers from turning to producers outside the cartel.
"We have to be very careful how to deal with increasing inventories at a time when there is pressure to increase OPEC production," Qatar's oil minister, Abdullah bin Hamad al-Attiyah, said Tuesday as he left for Vienna.
For Mohammed bin Dhaen al-Hamili, the United Arab Emirates' oil minister, OPEC essentially has two options: Keep its current production ceiling at 27.5 million barrels a day, or increase it by an amount that will cool oil prices.
The law of supply and demand isn't the main factor driving up prices, al-Hamili contends.
"Market fundamentals clearly indicate without any doubt that supply in the world markets is more than demand," he said.
OPEC President Sheik Ahmed Fahd Al Ahmed Al Sabah said last week that the cartel would increase the ceiling by 500,000 barrels per day to show to consumers that it's doing its best to cool prices.
Nigeria will increase its oil output by 500,000 barrels a day within 18 months, Edmund Daukoru, Nigeria's presidential adviser on petroleum and energy, said Tuesday.
Algerian Oil Minister Chakib Khelil said Monday he would back any plan by OPEC to raise its official output ceiling, and said he saw support among other cartel members to do so. Among them was Nigeria, as Daukoru said Monday he also would support such a plan.
But others were wondering whether the group has the pull to bring prices back down.
"If you look at spare capacities, it implies that OPEC does not have much room to maneuver," Orrin Middleton, an analyst with Barclays Capital in London, said Monday. "I don't think they have much up their sleeve to influence prices at this point."
Although lower prices are in OPEC's interest, "the group's power over oil prices is diminished because of the scarcity of excess capacity," said Robert Plexman, an analyst with Canada-based CIBC World Markets Corp.
Saudi Arabia is the only country in the group known to have the ability to add barrels to daily production. Naimi said recently that even if OPEC raises its production ceiling, it may not make much sense to actually add oil to the market.
"Any decision by OPEC to increase oil production at this week's meeting in Vienna can't be implemented," said Zanganeh, the Iranian oil minister.
Oil prices have been rising for 2 1/2 years and have more than doubled since then.
Jochen Hitzfeld, an economist with Germany's HVB Group, expects Brent crude prices to average US$51 a barrel this year and US$56 next year.
WILLIAM J. KOLE, Associated Press Writer
After it turned out that Deputy Prime Minister Andrei Belousov included the Fonbet betting company in the list of backbone enterprises that can count on state support, everyone started talking about these bookmakers.