The price of oil has surged to its highest level since the 1991 Gulf War.

One barrel of crude oil is now worth $30.10.

Oil futures rose as high as $30.40 before falling back slightly in trading in London.

US President Bill Clinton said the rise was "deeply troubling" and refused to rule out any US action to deal with the situation.

"The market is sceptical of words. It needs action in the form of physical oil," said Peter Gignoux, head of the energy desk at Salomon Smith Barney in London.

The rise has been caused by a successful campaign by members of Opec, the organisation of petroleum exporting countries, to restrict their output.

Their action started last spring and the price of crude oil has more than doubled since then.

Many observers believe that the price of oil will continue to rise, contributing to higher prices for petrol over the summer and sparking off inflation.

Already, the cost of heating oil in the Eastern United States has risen sharply, causing hardship and political controversy.

According to the International Energy Agency, inventories of crude oil in the major industrial countries are at their lowest level since 1997.

The Secretary General of Opec, Rilwanu Lukman, told the BBC that oil prices were "rather high at the moment", but he expected them to moderate in the near future.

Opec stands firm

However, there is still some uncertainty as to whether Opec members will continue to maintain their production cuts.

Saudi oil minister Saud Nasser Al-Sabah said Opec had no plans to raise the current oil production ceiling despite rising crude prices.

"There is general agreement among the Opec member states to extend the agreement on production cuts," he said.

"Our position is clear. This position will not change and (Opec) members are not even considering" such a move.

Current production cuts, due to expire at the end of March, are to be reviewed at an Opec ministerial conference scheduled for 27 March in Vienna.

But Mexico, a large producer but not a member of Opec, has said that production now should rise.

"What's required is to have a policy that allows more oil to be put on the market," said Mexican Oil Minister Luis Tellez.

Venezuelan Oil Minister Ali Rodriguez said on Monday that he and his Saudi Arabian and Mexican counterparts would meet in early March to discuss whether to maintain the cuts.

Pressure on producers

With supplies dwindling, the US Congress has been putting pressure on Washington to get tough with Opec producers.

US Energy Secretary Bill Richardson will travel to Mexico, Venezuela, Saudi Arabia and Kuwait later this month.

The oil price rise could cause a slowdown in the whole world economy if it causes policy makers to raise interest rates more than they otherwise planned in order to control inflation.