Opec signals early output rise on cards

Ali Al-Naimi, Saudi Arabia's oil minister, said yesterday that Organisation of Petroleum Exporting Countries could increase output ahead of its November meeting if supply worries continue to push up oil prices.

Ali Al-Naimi, Saudi Arabia's oil minister, said yesterday that Organisation of Petroleum Exporting Countries could increase output ahead of its November meeting if supply worries continue to push up oil prices.

Mr Naimi said the oil cartel was working for market stability in co-operation with producers from outside the organisation. Asked yesterday if Opec would decide to raise production before its scheduled 12 November meeting, Mr Naimi said: "Everything is possible, even before the meeting. This depends on the price. Our aim is to get an average price of $25 a barrel."

Brent crude oil futures hit a 10-year high of $35.30 last week before closing Friday at $32.60 a barrel in London, amid Israeli-Palestinian violence."

The ministers of the oil-rich region, including the world's largest oil exporter Saudi Arabia, who were meeting yesterday in Abu Dhabi at a Gulf energy conference also pledged that producers would not cut supplies over the Middle East crisis. "If there is demand, Opec and other producing countries are more than ready to give the market what it needs," he said.

Rumours that Saudi was preparing to halt oil shipments to the US in protest at its support for Israel were among many factors buffeting the spot price last week despite repeated denials. The spectre of Middle East tension sparking a repeat of the 1973 oil crisis continues to stalk the markets.

Asked if Arab producers would cut oil supplies in support of Palestinians in their fight against Israel, Mr Naimi said: "Let us not talk about this subject. I don't see any use in such talk." He added: "The concern now is with high prices and our efforts are to bring them down."

Mr Naimi also ruled out a cut in oil supplies. "We believe that supply is more than demand today, but we have a mechanism. If the price is above the limit we set then there is no doubt that we will increase supply."

Under Opec's informal price mechanism, which resumed on 1 October, if the cartel's crude basket price stays above $28 a barrel for 20 working days or below $22 for 10 working days, crude output will be adjusted by 500,000 bpd either way. In the 10 working days since October 1 prices have stayed above $28, and if they continue at that level an output rise should be triggered at the end of the month.