Opec should raise output by 1mn bpd

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Opec should raise oil output by a further 500,000 barrels per day (bpd) to ensure sufficient supply in the fourth quarter when seasonal demand rises, an Opec delegate said on Wednesday.

The comments contrast with recent remarks from Opec officials that world oil markets have enough crude oil and that a surge in prices to record highs reflects factors beyond the group's control.

"My personal view is I think we need to increase another 500,000 bpd in November," said the source, one of the more senior delegates in Opec.

Leaders of Opec member countries gather on November 11-18 in Riyadh for their third heads of state summit, an event that is usually a talking shop that makes no decision on supply policy.

Opec oil ministers are expected to meet during the event.

In a gesture to consumers, Opec agreed at a September meeting in Vienna to pump an extra 500,000 bpd from November 1, with top exporter Saudi Arabia assuming the lion's share.

Saudi Arabia was the driving force behind the increase, a move other members such as Iran and Venezuela opposed until the last minute. Some delegates at the time had said a boost of one million bpd was needed.

The imminent 500,000 bpd production increase has failed to check oil's upward march and US crude on Friday hit a record high of $90.07 a barrel.

While Opec shares consumer governments' concern over record-high prices, some in the group say pumping more will not contain a rally driven by speculators, a weak dollar and political tension in the Middle East.

Javad Yarjani, head of Opec affairs at Iran's Oil Ministry, told reporters in Beijing there was no shortage of oil in the market and that prices were being driven up by fear rather than fundamentals.

"As far as future consumption, and stocks [is concerned]... there is definitely no shortage of crude oil. You may see in some places, some shortage of products, but that is again because of lack of refining, or sometimes glitches at refineries," he said. - Reuters

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