OPEC producers have said they see little impact on economic growth so far from oil's relentless price surge which today racked up yet another record high.
OPEC, which controls around half the world's oil exports, said in its monthly market report it had raised production in July and expected further increases in August and September to allow world stocks to build and keep prices under control.
US oil futures set a high of $47.04 a barrel earlier today - up nearly $10 a barrel since the end of June. Record peaks have been set in all but one of the last 14 trading sessions on the New York Mercantile Exchange.
OPEC said today that the world economy seemed to be coping just fine. 'The direct contribution of the concern-driven rise in oil prices to the economic slowdown in 2004 has been very small,' the cartel said.
OPEC's own reference basket price was last valued at $41.75 a barrel, after spending all this year above the cartel's official $22-28 a barrel target range.
Oil prices are surging as rapid demand growth, led by China and the US, stretches the world supply system to the limit. The strain on world supplies would magnify the impact of potential disruption to supplies from a big producer. German
Chancellor Gerhard Schroeder said today it was important to carefully monitor oil costs but that record-high crude prices were not yet affecting economic growth.
The report - used by ministers as a guide for setting supply policy - is the last before OPEC meets on September 15 to set policy for the fourth quarter.
The assessment of a modest economic impact will strengthen the argument of price hawks in the organisation who are reluctant for the group to let supplies build too much and risk a sudden price fall.
OPEC said it had already raised production in July to a level that should permit a substantial build in world oil inventories in the fourth quarter of this year.
OPEC raised production 599,000 barrels per day in July to 29.57 million barrels per day, the cartel said. July's production figure is more than 1.25 million bpd above the cartel's 28.25 million bpd estimate of likely demand for its crude oil during the fourth quarter when heating demand rises during the northern hemisphere winter.
Industry sources have said top world oil exporter Saudi Arabia is set to boost crude output close to 10 million bpd in September. OPEC assessed Saudi output in July at 9.31 million bpd. OPEC expects demand for its crude oil next year to hit 27.5 million bpd, up from a forecast 27.17 million bpd over the course of this year, the report said.
