LONDON - Oil prices fell 6 percent Wednesday as traders dismissed attempts by OPEC members to dissuade Saudi Arabia from its plan to unilaterally pump an additional 500,000 barrels of crude per day.
Libya appeared to side with Iran, Iraq and other OPEC members urging Saudi Arabia not to act alone, and the Saudis strove to find consensus on the divisive issue.
However, industry analysts predicted that Saudi Arabia, the world's No. 1 oil producer, would push ahead with its plan to boost output if oil prices fail to drop sharply in coming days. The markets seemed to anticipate a production increase, with crude and other oil-related products declining.
''I don't think they're backing off,'' Leo Drollas, chief economist of the Center for Global Energy Studies in London, said of the Saudis. ''I think they'd be willing to put the oil on the market themselves.''
The 10 other OPEC members reacted with anger and disbelief after Saudi Arabia said Monday it would add about 2 percent to the cartel's official output of 25.4 million barrels a day.
Except for Kuwait and the United Arab Emirates, no other OPEC members have enough surplus capacity to quickly raise their production levels.
In a conciliatory gesture, a Saudi official, speaking Wednesday on condition of anonymity, stressed that Saudi Arabia would make a decision after consulting with other OPEC members.
The consultations would begin in the next few days, said the official, who spoke from the Saudi capital Riyadh.
In London, the price for August contracts of North Sea Brent crude fell for the second straight day, slipping 36 cents a barrel from Tuesday's close of $29.22 on the International Petroleum Exchange. Brent closed Monday at $31.10, before the Saudis announced their planned increase.
Light, sweet crude futures fell $1.83 a barrel to $30.67 on the New York Mercantile Exchange, which had been closed since Friday for the Independence Day holiday weekend.
In addition, prices of U.S. gasoline contracts dropped 4.7 percent, heating oil contracts lost 4.3 percent and natural gas contracts tumbled 8.2 percent, although such changes generally take a few weeks to affect the retail market.
''It's a good day for the consumer,'' said Peter Gignoux, head of the petroleum desk at U.S. investment bank Salomon Smith Barney.
Gasoline prices have climbed to more than $2 a gallon in some parts of the United States.
The Saudis announced their intention to hike production after it became clear that an increase of 708,000 barrels per day agreed upon by OPEC oil ministers last month was not enough to drive down prices.
With the United States and other importers demanding relief, the Saudis want to open their taps further in hopes of trimming the price of the so-called OPEC basket of seven different crudes to a more sustainable $25 a barrel from $29.66 on Tuesday.
''The Saudis are prepared to risk a fair amount to help put the price of crude oil down - risking the stability of prices (and) risking the OPEC consensus,'' Gignoux said.
OPEC, a fractious group whose members have widely varying interests, has historically tried to reach decisions by consensus.
A source close to the Libyan oil ministry said Wednesday that OPEC members believe Saudi Arabia was unlikely to boost crude output without their approval.
The Iranian OPEC governor, Hossein Kazempour Ardebili, said his country and Saudi Arabia agreed any action on output should be unanimous. Speaking on Iranian radio, Kazempour suggested that a further increase in oil production was unnecessary.
OPEC president Ali Rodriguez, who also is Venezuela's oil minister, said Wednesday that the group would not increase output at this time, and he insisted the Saudis would not do so on their own.
''Saudi Arabia respects and agrees that any output decision by OPEC should be by consensus,'' Rodriguez said.
Iraq's oil minister, Amer Mohammed Rashid, said earlier that the Saudi action was ''totally unwarranted'' and accused the country of yielding to U.S. pressure.
Drollas, the energy economist, noted that the same OPEC members opposed to the Saudi plan are those lacking the capacity to pump more crude, and he described the Saudi announcement as a clever way to test the market.
''By the end of next week,'' he said, ''we should know what they've decided.''
