Opec plans to raise oil output

KUWAIT - Opec president Sheikh Ahmad al-Fahd al-Sabah will propose the cartel raise its output by 500,000 barrels per day when the group meets next month in an attempt to help cool oil prices at record highs.

Sheikh Ahmad, also Kuwaiti oil minister, said he will also propose a 500,000 bpd increase in the group's official output ceiling at the September 19 meeting in Vienna.

"I hope this will at least help the market and the prices to be more stable," said Sheikh Ahmad.

The 10 Opec members, bound by formal production quotas, produced 28.21 million bpd in July, slightly in excess of their 28 million bpd output ceiling.

"We are worried," said Sheikh Ahmad. "Opec is worried about the situation in prices although we are trying to do everything to stabilise the prices. But it looks like the prices are not related to production any more, it's related to the other factors like the geopolitics, the weather, refining."

Oil prices hit a record US$70.80 ($102.69) a barrel on Monday as Hurricane Katrina headed towards US oil and gas production in the Gulf of Mexico.

Prices eased from that peak to around $69, but Sheikh Ahmad's comments failed to bring them lower still.

- REUTERS