OPEC: output increases?

The prospect of crude oil at $100 per barrel hangs over this weekend's OPEC meeting. 

Saudi Arabia is hosting the third summit for heads of state of the 12 established members of the international cartel -- plus incoming member Ecuador -- in Riyadh. Consumer nations are urging producers to pump more, but the gathering lacks the status of a full consultative meeting at which the group's oil ministers take decisions on oil output. OPEC is more likely to consider ramping up output when it meets again on December 5 in Abu Dhabi.

In the meantime, OPEC will insist it is supplying enough crude. It argues that speculators, a weak US dollar and geopolitical tensions are the current drivers of oil's rally. While increasing output would require large-scale investment, the cartel knows that it could suffer if developed countries continue to pursue alternative energy sources such as biofuels and nuclear power.

The International Energy Agency (IEA) warned a fortnight ago that OPEC would have to double production over the next 25 years to meet demand. In this context, continued price volatility and political forces may force a rise in output in December.