The Organization of the Petroleum Exporting Countries (OPEC) will meet today, June 8 in Vienna to talk about increasing oil production. Preliminary news reports are hinting at Kuwait and Saudi Arabia pushing for a 1.5 million barrels per day increase in production to cool off oil prices. West Texas Intermediate oil is currently a little below $100 a barrel, but most other blends are above $100 per barrel. Iran, Venezuela, and Iraq oppose the increase.

The increase appears to be based on an attempt by OPEC to re-balance supply with demand for OPEC crude. The latest OPEC Monthly Oil Market Report (May 2011) (PDF) indicates that demand for OPEC crude oil will average 29.9 million b/d in 2011. An increase in production by 1.5 million b/d would raise production from April's 28.8 to 30.3 million barrels per day,assuming that the statements made by OPEC are about production increases, and not about rising the quota level - something that is not at all clear.

*Update: OPEC has been unable to reach an agreement due to which production quota will not change. Saudi Arabia has announced that it will likely raise production regardless of the decision. “It was one of the worst meetings we’ve ever had..We were unable to reach an agreement” Saudi Arabian Oil Minister Ali al-Naimi said as representatives of the 12-member group left the meeting in Vienna after five hours of talks. (Bloomberg)