OPEC To Raise Supply Limits

Opec oil producers yesterday prepared to raise supply limits to counter consumer calls for action to take the sting out of inflated energy bills.

Under pressure from importing nations, the Organisation of the Petroleum Exporting Countries starts a 2-day meeting today to consider raising output just as world oil demand buckles under the impact of high prices.

Crude has fallen from a record $70.85 a barrel in the three weeks since Hurricane Katrina tore into US Gulf refineries, closing at $63 on Friday.

"For Opec the price is still very high," Opec President Sheikh Ahmad Al Sabah told reporters in Vienna.

"The political pressure to increase output will be well balanced by market reasons not to do so," said US consultancy PFC Energy.

Ministers say they will consider adding 500,000 to 1 million barrels a day, 2-3.5 per cent on top of existing limits of 28 million bpd. Iraq, with no quota, pumps an additional two million bpd.

Lack of refining capacity for processing the extra crude means any deal is unlikely to mean more real oil from Opec.