OPEC expected to increase quotas

OPEC is expected to announce that it will up its output next week, to ensure that global demand is met.

This increase in output quotas is expected to occur even though both OPEC and the International Energy Agency has cut their estimates of how much demand for oil and oil products will grow this year.

Analysts say that crude oil supplies are abundant and that the current loss of around 840,000 barrels a day of crude oil production caused by continuing shutdowns of drilling rigs due to damage by Hurricane Katrina are offset by four closed refineries with a total capacity of around 880,000 barrels per day.

Three of those refineries are expected to be closed for several months. One bit of good news from the US government was that there is no evidence of major damage to underwater oil pipelines in the Gulf of Mexico.