The Saudis say they will come to the rescue. OPEC will meet and the Saudis are promising to increase oil production against the wishes of Iran. The Wall Street Journal writes, "Key OPEC officials said the group is likely to raise its oil-output ceiling, but open criticism from Iran sets the stage for a public fight at the producer group's first gathering since this year's uprisings in the Middle East." The Journal says that, "An economic advisory group within OPEC on Friday presented findings showing global oil demand would increase significantly in the second half of 2011, according to a senior OPEC delegate from a Persian Gulf country…‘The most likely outcome of the meeting will be an increase,’ the delegate said .The numbers presented at the meeting suggested OPEC will need to boost its crude-oil production quotas beyond current output levels. The eleven member nations bound by quotas – Iraq is exempt – already are producing about 1.5 million barrels a day above allotments totaling 24.845 million barrels a day. Because OPEC – and mainly Saudi Arabia – isn't pumping at full capacity, the group has sway over oil prices. Taken together, the 12 countries that comprise OPEC are producing crude at an estimated 29.1 million barrels a day, accounting for roughly a third of world output. Even if OPEC raises its quotas just to match actual production, that raises the prospect of additional barrels coming to market, because some member nations then will have more leeway to "cheat" by producing more than they're supposed to. ‘The amount of the increase is yet to be decided by OPEC ministers,’ the delegate said. ‘All the numbers in the market now are just guesswork.’
"Any increase could keep a lid on oil prices which have been volatile in recent weeks as the outlook for further economic growth in the U.S. and abroad has been muddied by disappointing macroeconomic data." The Journal goes on to say, "Iran's OPEC governor, Muhammad Ali Khatibi, said a move to boost output was ‘difficult to understand’ in light of high inventories and the recent drop in oil prices. ‘We should respond based on facts and figures, not based on rumors or expectations from OPEC,’ Mr. Khatibi said in a telephone interview. The debate suggests this week's gathering in Vienna could be OPEC's most contentious in years, as the organization struggles to find a common voice in response to triple-digit oil prices and the rising clamor of consumers for more oil. The meeting comes against a backdrop of historic political change in the oil-rich Middle East/North Africa region that has exacerbated tensions between some Middle Eastern governments, as several have boosted domestic spending to head off further unrest. OPEC has not boosted output since before the 2008 economic recession. Its last increase was in 2007. Adjust its quota system just to reflect current output levels could be more palatable for Iran, because such a move wouldn't explicitly permit additional production, another delegate said. ‘It would be the most diplomatic solution, the best outcome,’ said the OPEC delegate. Producers have been under increasing pressure to respond after the International Energy Agency, which represents some of the world largest oil consumers, said in May that ‘We are prepared to use all tools’ in light of ‘serious concerns’ about high oil prices. Producers took the IEA statement as a veiled threat the group would release emergency stocks if OPEC doesn't act."
And down in the Gulf! The NHC warns that, a "North Atlantic...Caribbean Sea and the Gulf of Mexico...1. A large but disorganized area of showers and thunderstorms associated with a broad low pressure system continues over much of the central and western Caribbean Sea. The area of lowest pressure is located about 130 miles south of Grand Cayman and remains separated from the strongest thunderstorm activity. However...some development of this system is possible during the next day or so before upper-level winds become unfavorable. There is a medium chance...40 percent...of this system becoming a tropical cyclone during the next 48 hours. An air force reserve hurricane hunter aircraft mission has been rescheduled to investigate the system tomorrow...if necessary. Regardless of development...heavy rains could cause flash floods and mud slides over portions of Haiti and Jamaica as the system moves slowly toward the northwest or north over the next couple of days. Elsewhere...tropical cyclone formation is not expected during the next 48 hours.”