updated 6/14/2005 12:11:05 PM ET 2005-06-14T16:11:05

With its clout and credibility at stake, OPEC leaders said Tuesday they will attempt to lower soaring oil prices by raising the cartel’s production target.

But economists dismissed the move to lift the official quota to 28 million barrels a day, noting that the 10 member nations bound by it are already pumping that much. They said oil markets — and drivers suffering sticker-shock at the gas pumps — are unlikely to see much of a difference if the Organization of Petroleum Exporting Countries takes the expected step at its meeting Wednesday.

“Even if OPEC decides to raise its output ceiling, it won’t ease fears of tight supply toward the end of the year,” warned Paul Horsnell, head of energy research at Barclays Capital in London.

OPEC President Sheik Ahmed Fahd Al Ahmed Al Sabah of Kuwait said Tuesday the group had little choice but to act with prices so stubbornly high.

“Whenever it’s over $50, we have to react,” he said. “The market is well-supplied, but we have to do everything we can to make more reasonable prices.”

Key OPEC members expressed support for boosting the output ceiling by 500,000 barrels a day, and some suggested they might be willing to raise it by another 500,000 barrels later this year.

Analysts, however, characterized the shift as purely symbolic. Some wondered whether the group had the pull to bring prices — which have hovered around $55 per barrel — back below the psychologically important $50 threshold.

Raising the ceiling by 500,000 barrels a day won’t make any difference to the actual oil market because the crude is already there, conceded Iran’s oil minister, Bijan Namdar Zangeneh.

“I’m not for it, I’m not against it, because I think it’s on the market — and if you want to be realistic, it means no change in the real situation,” he said.

Mohamed bin Dhaen Al Hamli, the United Arab Emirates’ energy minister, said he would support anything to ease jitters and “make the market comfortable,” while Edmund Daukoru, Nigeria’s presidential adviser on petroleum and energy, also stressed the need for action to try to cool high prices.

“I have no doubt we need to do something immediately,” he said.

Qatar’s oil minister, Abdullah bin Hamad Al Attiyah, said the world’s oil market was well supplied but that it couldn’t produce more crude currently if needed.

Al Sabah said the main problem was the inability to quickly refine lesser-quality oil, which has created a bottleneck in efforts to increase production. “The main problem now is the refining,” he said.

Al Sabah said the cartel would increase the ceiling by 500,000 barrels per day to show to consumers that it’s doing its best to cool prices. He said a second 500,000 barrel-per-day increase was being mulled for later this year.

Saudi Oil Minister Ali Naimi said Tuesday he also wants the 11-nation cartel to get prices below $50. “That is what is reasonable worldwide,” he said.

“OPEC is doing its share for the market,” Naimi said. “The supply is there. Don’t panic.”

Including Iraq, which is not bound by the output quota, OPEC is churning out close to 30 million barrels a day, or about 35 percent of current global demand.

On Tuesday, light, sweet crude for July rose 3 cents to $55.65 a barrel on the New York Mercantile Exchange. On the International Petroleum Exchange, July Brent fell 63 cents to $54.15 a barrel.

OPEC contends that it sees the most benefit from prices in the $40 to $50 range. The group has no interest in seeing prices plummet, but also wants to keep buyers from turning to producers outside the 11-nation cartel.

“If prices go under $40 a barrel, OPEC should cut production by 500,000 barrels” to compensate, said Libya’s energy secretary, Fathi Hamed Ben Shatwan. But he added: “Practically, we do not have the physical capacity to add to the market ... the market has a psychological, not a physical, problem.”

But the market’s psychology has become a real problem for OPEC.

“For the past 1 1/2 years, OPEC has been incapable of pushing prices down,” said Deborah White, an energy analyst at Paris-based SG Securities.

“In order for them to regain control over oil prices, they need to have clear objectives followed by clear actions,” she said.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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