OPEC may raise production

DUBAI, United Arab Emirates - Faced with increasing international pressure to lower oil prices, OPEC ministers gathering in Vienna, Austria, this weekend will attempt to convince consumers they are doing all they can to keep the market well-supplied and prices stable.

With prices about 50 percent higher than a year ago and motorists feeling the increase at the gasoline pump, the ministers have repeatedly said that OPEC is concerned, but that factors beyond their control are to blame - something analysts agree with.

At the meeting Monday, the Organization of Petroleum Exporting Countries is widely expected to increase the production ceiling by 500,000 barrels a day, although analysts said the impact will be minimal.

Previous OPEC moves have done little to ease market fears over supply.

"I think the degree of influence that OPEC can have on the markets at this meeting is rather limited. There's actually a need for more refining capacity, rather than crude," said Valerie Marcel, an oil analyst at the Royal Institute for International Affairs.

Production outages caused by Hurricane Katrina, continued instability in Iraq and the upcoming winter season have put pressure on prices, with crude reaching more than $70 a barrel in the aftermath of the storm.

Katrina slammed into the U.S. Gulf Coast, a major oil production hub, at a time when producers worldwide already were struggling to cope.

The storm was blamed for the evacuation of more than 700 offshore platforms and rigs.

Muhammad-Ali Zainy, an energy analyst at the London-based Center for Global Energy Studies, said a production increase by OPEC will have a dampening effect on prices, but the increase will not be significant.

"The market is not hungry for crude oil, it is hungry for oil products," Mr. Zainy said.