OSAKA -- OPEC leaders and oil industry analysts welcomed Iraq's decision Tuesday to allow weapons inspections by the United Nations, but cautioned it was too early to determine what effect the decision will have on oil prices and production.
"We will just have to wait and see the final impact Iraq's decision will have on oil prices," OPEC Secretary General Alvaro Silva Calderon said Tuesday morning in Osaka, where ministers from the 11-member body are scheduled to meet on Wednesday and Thursday.
Immediately after Iraq's announcement, oil prices fell to about $28 a barrel, a 19-month-low.
The primary focus of the Osaka discussions was expected to be on whether or not to boost output quotas in response to the price of oil, which had surged to nearly $30 per barrel by Monday, a rise of more than 50 percent since the beginning of the year.
Most of OPEC opposes a rise in output, although consumption normally climbs in the autumn and winter.
While the OPEC secretary general remained cautious, other OPEC sources said Iraq's decision could mean a drop of between $2 and $4 a barrel when the ministers conclude their meetings Thursday.
However, Saudi Arabia, which produces about 12 percent of the world's oil and nearly half of OPEC's total, has not yet committed itself to raising production.
The Saudi Arabian delegation is expected to arrive on Wednesday. The Iraqi delegation was due in Osaka later Tuesday evening, along with representatives from Qatar. The Nigerian delegation arrived Tuesday afternoon.
