More Output, Higher Prices From OPEC : Energy: Oil ministers voted to raise the cartel’s production ceiling. They also set the target cost of a barrel at $21.

OPEC oil ministers reached swift, unanimous agreement today on raising the cartel’s production ceiling from 22.1 million barrels a day to 22.5 million and increasing the target price by $3 a barrel to $21.

“We have finished everything,” Iranian Oil Minister Gholamreza Aghazadeh told reporters after a series of intense private talks among the 13 oil ministers at their key midyear conference. “The main issue is that the new reference price is $21 and the ceiling is 22.491 million barrels a day.”

The $21 price is an average of what OPEC members want to be paid for their seven principal crude oils. Prices actually paid by the market depend on production--going down if there is cheating on the output quota but rising if OPEC members honor their individual agreements.

Aghazadeh said the new production and price levels would remain in force until the end of the year and OPEC would set up two groups to “control” production--something the cartel has tried but failed to do in the past.

The ministers agreed that if some members are unable to meet their production allocations, their quotas will be reduced at OPEC’s conference in December, while others will then be given higher quotas.

Delegates and officials said a compromise on the $21 base target price was reached first by powerful OPEC members Saudi Arabia and Iraq and then endorsed by the 11 other members.

The agreement, which also was confirmed by Saudi and Iraq oil ministers, emerged in only two days--an extraordinarily short session by OPEC standards.