ISFAHAN, Iran, 17 March 2005 — Driven by fears of a winter supply crunch at year’s end, OPEC oil ministers agreed yesterday to immediately authorize the pumping of an extra half-million barrels of oil a day and to approve a similar boost later if prices do not fall.

Unimpressed, the price of crude on the New York market soared to a new intraday high of over $56 a barrel yesterday in response to the latest petroleum supply report from the US government which showed that domestic supplies of gasoline and heating oil fell sharply last week.

OPEC’s acting secretary-general voiced disappointment at the price spike. “It’s not the result we wanted,” said Adnan Shihab-Eldin. “Prices should have eased.”

The market took little notice of OPEC’s decision because the group is known to be already exceeding its production ceiling by about 700,000 barrels a day. The new higher ceiling does not necessarily mean extra supply.

Officials from Kuwait and Saudi Arabia signaled more oil would soon hit the market, saying they will be producing at least an additional 370,000 barrels a day by April.

Light, sweet crude for April delivery rose $1.20 to $56.25 a barrel on the New York Mercantile Exchange.

The previous intraday high, set in October, was $55.67. The highest Nymex settlement price for crude futures is $55.17, which was set twice in October.

OPEC’s decision to look to winter and raise its quota just ahead of the Northern Hemisphere springtime — when demand normally falls — was unusual. It reflected concern about OPEC’s ability to influence a stubbornly bullish market that has driven prices of benchmark light crude up about 25 percent this year alone.

Edmund Dakouru, a Nigerian oil official, said “the extra oil will go a long way” toward meeting any concerns about winter supply.

But others at the meeting suggested the decision was symbolic.

“We’re already all over quota,” Algerian Oil Minister Chakib Khelil told reporters.

The decision to boost output will officially raise the group’s ceiling to an all-time high of 27.5 million barrels a day.

But with Iraq — which is exempt from OPEC quotas while rebuilding — and quota-busting factored in, OPEC is already producing close to 29.5 million barrels.

In an attempt to ease winter crunch worries, OPEC’s president, Kuwaiti Oil Minister Sheikh Ahmad Fahd Al-Ahmad Al-Sabah, said that at full capacity — and including Iraq — the oil-producer group could pump some 31 million barrels a day.

That would represent a daily increase of about 1.5 million barrels from present levels.

“OPEC has the resources to meet the growing oil requirement ... forecast for the early 21st century, and is committed to ensuring that the market remains well-supplied with crude at all times, at reasonable prices that are compatible with robust growth in the world economy,” he said.

But not all ministers agreed. Ahead of the meeting, Khelil said: “OPEC has reached its production limits.”

“If it came to a crunch, it has capacity for 1 million barrels,” he said.

Even before the NYMEX spike, OPEC ministers appeared to be resigned to the fact that yesterday’s decision would not impress the oil market. “The market is not under my control,” Qatari Oil Minister Abdullah ibn Hamad Al-Attiyah told reporters.

Al-Sabah suggested that OPEC believed oil was overvalued, describing the prices as “a matter of much concern to OPEC, since they are reaching levels that are not sustainable.”