Opec output to hit record

OIL cartel Opec is set to push its official production quota to its highest-ever today in the latest attempt to cool world crude prices.

Ministers meeting in Vienna are close to consensus on a plan that would see output rise by 500,000 barrels a day to 28m. Some members have also recommended that, should prices fail to fall, Opec's president, Kuwaiti oil minister Sheikh Ahmad al-Fahd al-Sabah, should start telephone talks to trigger a further increase of 500,000 barrels a day.

US light crude rose 22 cents to $55.22 a barrel ahead of the meeting as markets awaited official confirmation of the move. The price is only $3 away from the $58.48 record hit earlier this year.

Analysts said it was doubtful the production rise would dampen oil prices, given strong demand from China and India. America's summer driving season will boost demand for petrol and diesel. Opec yesterday increased its forecast for world crude consumption in the fourth quarter by 100,000 barrels a day to 30.6m.

Rob Laughlin, an analyst at Man Financial, said: 'Whatever official quota Opec agrees today pales into insignificance compared with what's needed. The cartel is already pumping at full capacity.' He said a move to $60 a barrel could not be ruled out.