World oil prices traded flat near all-time highs above 78 dollars on Wednesday after the Opec cartel agreed to what traders called a token output hike. At 2:09 pm (0609 GMT), New York's main futures contract, light sweet crude for delivery in October, was four cents higher at 78.27 dollars a barrel from a record 78.23 dollars per barrel in late US trades on Tuesday.
That price was close to the all-time intraday high of 78.77 dollars hit August 1. Brent North Sea crude for October delivery was three cents lower at 76.35 dollars a barrel.
The decision on Tuesday by the Organisation of the Petroleum Exporting Countries to pump an extra 500,000 barrels per day from the start of November was intended to signal the cartel's willingness to respond to supply fears in consumer countries.
But analysts forecast that oil stocks will continue to fall in rich countries during winter months in the northern hemisphere - the peak period for demand - applying upward pressure on prices. "I think it's a drop in the ocean," Steve Kelbrick, chief executive officer of Swiss-based South Energy Consulting SARL, said at a petroleum conference in Singapore.
"I don't think there will be much affect upon the price. I think the price movement is inexorable." Geopolitical risks, a lack of global refining capacity and fear of hurricane damage to Atlantic oil installations have also been driving crude prices higher.
Analyst David Kirsch from Washington-based consultancy PFC Energy said the Opec decision "will take some of the near-term supply concerns off, but shouldn't put too much downward pressure on markets."
Mike Fitzpatrick, at MF Global, said during US trading hours the market viewed Opec's move as only a token gesture. "We have very strong demand. Supply is dwindling until the year-end while demand will go even higher and (pressures are rising from) continued geopolitical unrest."
Saudi Arabia appeared to have forced through the increase in the face of stiff opposition from the majority of its Opec partners, notably price hawks Iran and Venezuela.
Some Opec ministers had talked of their unease at increasing production when the outlook for global economic growth - which determines future demand for oil - is uncertain. Kelbrick told AFP the only thing that will slow oil's upward movement is an "economic cold" in major consumers like China or the United States.
"And that's why everyone's talking about subprime at the moment because it could be the germ that creates the cold," he said, referring to mounting home foreclosures which triggered a wave of losses in the US "subprime" mortgage sector.
The 10 Opec members that are bound by production limits have raised their output target by 1.4 million barrels per day to 27.2 million bpd, from its current level of 25.8 million bpd, ministers explained.
This represents a real increase of 500,000 barrels per day from current levels because Opec was already producing 900,000 bpd more than its ooutput target, ministers said. Countries belonging to the cartel produce about a third of global oil supplies.
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