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OPEC to consider production increase

As international pressure mounts on OPEC to pump more oil to stem surging fuel prices, members of the petroleum producers' cartel said Saturday they supported raising their official output by at least half a million barrels a day.

Oil ministers from Iran and Algeria said they would back an increase of 500,000 barrels a day _ or 2 percent above OPEC's current production _ when they meet with their counterparts at a crucial meeting today in the Austrian capital.

Saudi Arabian oil minister Ali Naimi went further, suggesting that the Organization of Petroleum Exporting Countries would add "at least" that many fresh barrels to world markets. Saudi Arabia is OPEC's biggest producer and its only member with significant capacity to pump new oil.

While oil-importing nations are sure to welcome any increase, energy analysts warned that an addition of just 500,000 barrels a day would do nothing to roll oil prices back from 10-year highs.

"It wouldn't make a difference," said New York-based consultant Gary Ross. An increase of that amount is "already priced into the market," he said.

Finance ministers from 21 Pacific Rim countries, meanwhile, warned that rising oil prices could damage their economies. Officials attending the Asia-Pacific Economic Cooperation forum in Brunei drafted a statement they hoped would persuade producers to work to ease prices.

"Clearly, there's not enough oil . . . contrary to what OPEC claims," said Roger Diwan, a managing director of The Petroleum Finance Company, a Washington-based consultancy.

As they gathered for their meeting in Vienna, several OPEC ministers said they would agree to boost production in an effort to stabilize prices between $22 and $28 a barrel.

OPEC members agreed in June to pump an additional 500,000 barrels a day if the average price for several types of OPEC crude exceeded $28 for 20 consecutive business days.

As of Thursday, this average OPEC price was $33.84 and had been higher than $28 a barrel for 19 consecutive days.

Iran, Libya and other so-called price hawks in OPEC have resisted efforts to raise the production target, which currently is 25.4-million barrels a day. However, Iran might accept an increase of as much as 700,000 barrels a day.

Algeria's oil minister, Chakib Khelil, said he would accept a hike of 500,000 barrels. Obaid bin Saif Al-Nasseri, oil minister for the United Arab Emirates, said he would support "any increase."

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