Opec to increase oil output as prices soar

Opec, the oil producers' cartel, yesterday said it could pump out more oil to meet demand, as the price of crude shot to an all-time record for the fourth successive day.

Opec, the oil producers' cartel, yesterday said it could pump out more oil to meet demand, as the price of crude shot to an all-time record for the fourth successive day.

In an unexpected U-turn Purnomo Yusgiantoro, the Opec president, said the 11-nation cartel had spare capacity of up to 1.5 million barrels a day. It came a day after he said Opec could not pump any more crude to cool prices and that Saudi Arabia, the world's biggest exporter, could not immediately raise output.

His earlier remarks had triggered a fresh spike in buying on fears that the West was running short of supplies ahead of the United States' "driving season", when millions of Americans plan long holiday car journeys.

In a statement, issued yesterday, Mr Yusgiantoro said: "Opec continues to hold a spare production capacity of about 1 to 1.5 million barrels per day, which would allow for an immediate additional increase in production."

He said Opec was monitoring the continued rise in crude oil prices on the global markets "with concern". "Opec continues in its efforts to ensure that the market is adequately supplied with crude oil at prices acceptable to both producers and consumers," he said.

His comments, combined with signs of easing tensions between the Russian government and the Yukos oil company, triggered a fall in crude prices.

Oil prices had hit $44.34 a barrel, the highest since futures began trading in New York in 1983, before ending down $1 at $43.15 a barrel. In London, Brent crude dipped to $39.70.