As oil markets struggle to recover from the shock of Hurricane Katrina, OPEC officials meeting here Monday mulled whether to raise official crude output by 500,000 barrels per day or simply make more oil available on demand.
Ministers from the 11-member Organisation of Petroleum Exporting Countries are gathering in Vienna to explore ways to ease oil prices which, while off recent record highs, are now impacting on economies around the world.
OPEC President Sheikh Ahmad Fahd al-Sabah told a press briefing late Sunday that under the first option the cartel would "increase the (output) ceiling by 500,000 barrels a day to bring it to 28.5 million bpd."
An official quota of 28.5 million bpd would mark an all-time high since the headline OPEC figure was created in 1987.
The other option, Sheikh Ahmad said, was that OPEC producers would keep the production ceiling at 28 million bpd but would make two million more available if needed.
He did not indicate which possibility had the most support, but personally preferred the second, saying "that would stabilize the price" of crude oil, currently stuck above 60 dollars a barrerl.
Many OPEC ministers however had indicated with more or less enthusiasm that they would back a quota hike, and Algerian Energy Minister Chakib Khelil told reporters late Sunday he believed that was what the final decision would be.
Sheikh Ahmad, who is also Kuwait's oil minister, stressed Sunday that OPEC -- which accounts for 40 percent of world crude oil production -- sought "to make sure for everybody that there is enough supply".
But many OPEC members have said high energy prices were now due more to a lack of refining capacity, made worse by damage caused by Katrina along the Gulf of Mexico, rather than to a lack of crude oil.
With the exception of Saudi Arabia, the world's largest oil producer, OPEC countries are already pumping at full capacity, and above the current quota.
Most stressed therefore that new refineries were needed to relieve bottlenecks in the so-called downstream sector.
"The refinery problem cannot be solved in one day. We have to live with it until we upgrade our refining capacity and build new refineries," Sheikh Ahmad said.
Crude oil supply got a boost after industrialised countries that belong to the International Energy Agency decided on September 2 to release 60 million barrels of oil from strategic reserves over a 30-day period to counter the devastating effects of Katrina.
That scenario inspired the second OPEC option, according to the sheikh.
The oil cartel sought above all to reassure consumers and oil markets, where prices which hit a record 70.85 dollars in New York on August 30 in the hurricane's wake.
In response to urgent calls from oil-consuming countries, OPEC would "make sure for everybody that there is enough supply", Sheikh Ahmad said.
He expressed concern for consumers who had been slammed by sharply higher prices for petroleum products, noting "a lot of problems starting to show on the growth of economies, especially in underdeveloped countries".
But increased output by OPEC members has thus far failed to soften the impact of what some call a third "oil shock" following those of 1973 and 1979.
The Kuwaiti minister said oil prices had been kept high by the hurricane, by geopolitical tensions in the Middle East and by the refinery bottleneck, which he believed was the main problem.
But others suggested that oil supply might still be an issue.
Edmund Daukoru, the Nigerian presidential oil advisor, urged OPEC colleagues to agree on a realistic quota increase and announce "something on which we can deliver".
Analyst Jason Schenker of Wachovia Bank also warned that announcing a quota hike could backfire if the cartel was unable to come up with the goods.
"If they increase the quota and are not able to meet it, that would be the worse case scenario for the market and extremely bullish for international prices," Schenker said.
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