LONDON, June 14: World oil prices cooled on Tuesday, the eve of a production meeting of the Organization of Petroleum Exporting Countries (Opec) in Vienna, where the cartel was widely expected to increase its output quota.

New York’s main contract, light sweet crude for delivery in July, lost 22 cents to $55.40 per barrel in early deals.

In London, the price of Brent North Sea crude oil for delivery in July shed 50 cents to $54.28 per barrel.

The retreat in prices on Tuesday was “a little bit of reaction to perhaps the massive increases on Monday”, said Veronica Smart, analyst with the Energy Information Centre.

Prices had hit a two-month high point in New York on Monday, soaring by $2.08 to close at $55.62 per barrel amid fresh supply jitters despite expectations that Opec would increase its official output ceiling.

Ministers from the 11-nation oil cartel were meeting on Wednesday to plot their production strategy for the second half of the year.

“At Opec’s meeting in Vienna consensus appears to be turning toward a 500,000 barrel per day (bpd) increase in quotas that will ratify current levels of overproduction but that will do little to soothe market concerns about availability later in 2005,” Barclays Capital analyst Kevin Norrish said.

Industrialized countries have been pressing members of the cartel to raise their production ceiling for crude oil by half a million barrels per day (bpd) to 28 million bpd.

But real crude output is already far higher and in some instances running at full capacity, according to ministers and analysts.

The 11 Opec members are producing in excess of 30 million barrels per day compared with an official fixed ceiling of 27.5 million bpd for the Opec-10 (excluding Iraq), agreed in March in the Iranian city of Isfahan. Opec will step up its oil output from July, the cartel said on Tuesday as it explored ways of stabilizing prices and preparing for greater demand fuelled partly by China’s fast-growing energy needs.—AFP