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Last Updated: Tuesday, 20 September 2005, 23:39 GMT 00:39 UK
Opec to increase oil production
Opec headquarters in Vienna
Opec members are sceptical about the benefits of releasing more oil
Oil cartel Opec will release an extra two million barrels a day, some of the last spare oil production it has, in an effort to ease crude price pressures.

The extra supplies will be available for three months from 1 October and follow calls for Opec, which represents 11 producer nations, to lift output.

Oil prices hit record levels in the wake of Hurricane Katrina and there are worries it may slow the global economy.

However, many observers are unconvinced that Opec's move will help cool prices.

Status quo

Helping to underpin prices are concerns that Tropical Storm Rita -now strengthening into a category one hurricane - may damage US production further as it heads towards the Florida Keys.

As well as the storm threat, the main problem facing the oil market at present is a lack of refining capacity, not low supplies of crude, analysts said.

We will offer the market what Opec can produce
Venezuelan Energy Minister Rafael Ramirez

Experts added that any move by Opec - whose members are Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Indonesia, Libya, United Arab Emirates, Algeria and Nigeria - is likely to be little more than a symbolic gesture.

"It's just a small step ... I don't think it's going to be enough to bring the oil price down," said Rupert Krietemeyer, spokesman for EU Energy Commissioner Andris Piebalgs.

Opec has said that while it will make extra output available, it will not be changing its official production level of 28 million barrels per day.

Should the market need any extra crude, Opec said it is willing to offer as much as 2 million more barrels a day from 1 October for three months.

"The ceiling will be maintained the same and we will offer the market what Opec can produce," said Venezuelan Energy Minister Rafael Ramirez.

While not at record levels, oil prices are remaining stubbornly high.

US light sweet crude traded at $67.30 a barrel in New York on Monday, while Brent crude closed at $64.20 in London.

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