Opec, the international oil producers' cartel, appeared less likely to raise oil output quotas at its Vienna meeting today after Saudi Arabia's minister said there was no shortage of oil on the world market.

"What else can we offer? We have the crude and we are offering it," Ali al-Naimi said on his way to Opec’s ministerial meeting.

Opec's president, Sheikh Ahmad al-Fahd al-Sabah, had earlier told Reuters that the group was still discussing two proposals this afternoon.

"The first one is to increase production from 28 million to 28.5 million barrels per day, with (another) 500,000 barrels that the president can add at the president’s discretion," he said. "The second proposal is to make available two million barrels to the market if the market wants it."

A refusal to raise production by Opec would be likely to draw criticism from Gordon Brown, the Chancellor of the Exchequer, who last week called for more oil to be pumped after petrol prices hit £1 a litre in Britain and fuel protests were threatened.

The Chancellor told the TUC last week that the "problems faced by hauliers, farmers and motorists at a time of doubling oil prices" were "at root, a problem of demand outstripping supply". There was, he suggested, only one solution: "Opec must respond at its meeting on 19 September to rising demand by raising production."

Mr Brown will tell the annual meetings of the International Monetary Fund and World Bank this weekend that Britain is being hit by a global economic slowdown as a result of high oil prices as he continues his campaign for higher Opec production.

However, though Opec wishes to be seen to be taking western concerns over high oil prices seriously, there are widespread doubts over its power to control prices.

As The Times reported last week, Saudi Arabia, the leading Opec producer, is actually struggling to sell the oil it has on offer. Refineries prefer "sweet" crude to the sulpher-rich "sour" type that Saudi produces and the Kingdom is offering its oil at a discount to world prices.

Crude oil futures rebounded this morning from their lowest level since early August, amid concerns that Tropical Storm Rita, gaining strength off the Bahamas, could turn unexpectedly like Hurricane Katrina and hit US oil producers and refineries on the Gulf of Mexico coast.

On London’s International Petroleum Exchange, November-dated Brent crude was at $62.44 a barrel, or 63 cents firmer. Oil prices are around 40 per cent higher than a year ago.

Analysts have argued that a lack of refinery capacity, especially in the United States, has led to a ramping up of prices. Speculative traders, such as hedge funds, have also been identified as stoking the cost of crude.

"There are fears in the oil markets of the continued supplying of markets with crude oil although there's a big surplus. There are quantities that the market cannot absorb, there is no buyer," Sheikh Ahmad, who is also Kuwait's oil minister, said.

It is also common for oil-producing nations to break quotas to benefit from high prices. The role of speculative investors, such as hedge funds, distorting the markets by placing huge bets and waiting for prices to spike has also been highlighted.

However, the International Energy Agency told Le Monde that crude oil production from non-Opec countries will start to decline after 2010. Such a move would make oil-importers increasingly dependent on Opec.

"Conventional oil production (from non-Opec countries, but excluding heavy-grade oil and bitumen) will reach a ceiling just after 2010," Fatih Birol, the head of economic research at the IEA, said.

Non-Opec countries, which are not bound by production quotas imposed by the Opec cartel, currently account for about 60 per cent of global oil production. They include Russia, China, Canada, the US and Norway.

The comments come before the November 7 publication of the IEA’s World Energy Outlook 2005.

Elsewhere, it was reported that the International Monetary Fund will warn in a report due on Wednesday that shortfalls in investment in production and refining capacity will lead to further increases in oil prices over the next five years.

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