The Organization of Petroleum Exporting Countries said the higher output would begin Nov. 1. It pledged to "vigilantly monitor" the other factors buffeting crude markets, including worries that supplies might not keep pace with higher demand later this year as it becomes winter in the Northern Hemisphere.

Significantly — and surprisingly — the 12-nation cartel said the increase would be based on current production, meaning it will add real oil to the market.

In the recent past, OPEC has raised only its official output quota — and because it tends to pump over those targets, the increases were purely cosmetic.

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NEW YORK (AP) — Oil prices rose to a new record settlement price Tuesday as traders turned their attention to a government inventory report expected to show tight supplies and shrugged off OPEC's decision to boost output.

Even factoring in OPEC's decision to increase oil production by 500,000 barrels per day starting Nov. 1, "supplies are tight," said Addison Armstrong, an analyst at TFS Energy Futures LLC.

And according to analyst predictions, they're going to get even tighter. Analysts surveyed by Dow Jones Newswires, on average, expect Wednesday's report from the Energy Department's Energy Information Administration will say that crude oil inventories fell by 2.7 million barrels in the week ended Sept. 7.

Investors had already priced in OPEC's increase, and many were looking for a larger production boost, analysts said.

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WASHINGTON (AP) — The U.S. trade deficit declined slightly in July, helped by record exports that offset the biggest foreign oil bill in nearly a year. But even a spate of recalls did not stop the deficit with China from climbing to the second-highest level on record.

The trade deficit edged down 0.3 percent in July to $59.2 billion, compared with $59.4 billion the month before, the Commerce Department reported Tuesday. It was the lowest monthly imbalance since April.

So far this year, the deficit — which hit $758.5 billion last year — is running at an annual rate of $711 billion. Many private economists believe stronger economic growth overseas, a weaker dollar that makes American exports more competitive and slower growth at home will help lower the deficit after five consecutive years of record imbalances.

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By The Associated Press

The increasing cost of health insurance is putting coverage out of reach for many small to midsize companies and their workers, even though the rise in premiums this year was the lowest increase in eight years.

Since 2001, the cost of premiums has gone up 78 percent, far outpacing a 19 percent increase in wages and 17 percent jump in inflation, according to a survey released Tuesday by the Kaiser Family Foundation, a health care research group that annually tracks the cost of health insurance.

This year, the cost of premiums paid by workers and their employers was up 6.1 percent, while wages rose an average of 3.7 percent and inflation went up 2.6 percent, the survey said. Kaiser estimates that between 1 million and 2 million people join the ranks of the uninsured every year.

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WASHINGTON (AP) — A trade group for real estate agents on Tuesday lowered its forecast 2007 existing home sales for the seventh-straight month, predicting a drop of 8.6 percent from last year.

The National Association of Realtors' revised monthly prediction calls for U.S. existing home sales of 5.9 million in 2007, down from 6.5 million last year. The forecast was below last month's prediction of a 6.8 percent drop.

This year's sales would be the lowest since 2002, when sales hit 5.6 million. Home sale prices this year are forecast to drop 1.7 percent to a median of $218,200.

Next year, the trade group expects existing home sales to climb to 6.3 million. It forecasts new home sales will fall 24 percent to 801,000 this year and 741,000 next year.

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NEW YORK (AP) — Defaults among companies with speculative-grade credit are likely to triple over the next year, underscoring the recent weakness in the debt markets, Moody's Investors Service said Tuesday.

The default rate is expected to climb from 1.4 percent in 2007 to 4.5 percent in 2008 and 5.6 percent in 2009, according to Moody's projections. Default rates would likely climb even higher if the economy were to go into recession, Gates said.

A 4 percent default rate is in line with historical averages. During the most recent downturn in the cycle, default rates reached 11 percent in January 2002.

Investor appetite for speculative-grade debt has all but disappeared in the past two months. The troubles began as delinquencies and defaults among subprime mortgages — loans given to customers with poor credit history — rose rapidly.

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OAK BROOK, Ill. (AP) — McDonald's Corp. reported impressive August sales Tuesday, attributing a better-than-expected 8.1 percent increase in same-store results to strong demand for its breakfast items, drinks and new Chipotle chicken wrap as well as a continuing turnaround in Europe.

The monthly sales report sent shares in the world's largest restaurant company up more than 4 percent in morning trading and helped propel the Dow Jones industrial average higher.

The Oak Brook-based chain said its U.S. same-store sales grew 7.4 percent, which exceeded analysts' estimates. Besides the product popularity, some areas' later start to the school year also helped.

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DALLAS (AP) — Chip-maker Texas Instruments Inc. narrowed its third-quarter forecast Tuesday, saying it expects earnings of 49 to 53 cents per share on revenue between $3.56 billion and $3.72 billion.

In July the company said it expected fiscal third-quarter earnings between 46 cents per share and 52 cents per share on revenue between $3.49 billion and $3.79 billion.

The July sale of a semiconductor product line associated with DSL equipment boosted the per-share estimate by 2 cents, the company said.

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WASHINGTON (AP) — Subscribers will still be able to tune in their favorite shows when broadcasters shift to digital-only transmission in 2009.

Seeking more than a promise, Federal Communications Commission Chairman Kevin Martin wants commissioners to require cable companies to provide that service.

The FCC, which is scheduled to meet Tuesday, has been split over such a proposal in the past but may be moving toward a compromise.

The greatest impact of the digital conversion will be on viewers of non-digital televisions who receive their signals over the air. Beginning Feb. 18, 2009, they will be forced to buy a special converter box, subsidized by the government, to receive their channels.