Oil output increase to go ahead

Opec believes the market is stable at present

An oil production increase by Opec member countries will go ahead on 1 August, despite the cancellation of a ministerial meeting next week.

The meeting of Opec oil ministers in Vienna on 21 July has been called off, and they will next meet in September.

Opec is to raise production by 500,000 barrels a day to 26 million bpd.

However some analysts believe the increase will not have much effect, as most member countries are already pumping near capacity.

Opec president Purnomo Yusgiantoro told Reuters news agency on Friday: "The meeting is cancelled because the market is stable.

"There is no problem at the moment because the decision to increase 500,000 bpd from 1 August is in place.

"We will continue consultation among Opec ministers to see the developments in the market."

Meanwhile oil prices held firm around the $41 a barrel price on Friday.

Opec's 11 member states, eight of which are in the Middle East, supply about a third of the world's oil.

The output increase affects the Opec-10 group of 10 states, which excludes Iraq.