World oil prices increased again today after the pledge from the world's biggest oil exporter, Saudi Arabia, to raise production was unable to quell supply concerns following reports of fresh attacks on a pipeline on Nigeria.

Crude oil is currently trading at $136.60 a barrel despite Saudi Arabia saying at an emergency meeting of oil producing and consuming countries in Jeddah over the weekend that it will raise daily crude output by 200,000 barrels to 9.7 million barrels next month, and committed to pumping more if needed.

Market analysts suggested the rise in production was insufficient, saying production had to rise to at least 500,000 barrels. Saudi Arabian Oil Minister Ali Al-Naimi admitted yesterday that the move was unlikely to tame prices.

"I am convinced that the supply and demand balances and crude oil production levels are not the primary drivers of the current market situation and that markets are already well-supplied," Mr Naimi said.

"But... I also strongly believe that each of us must do what we can to alleviate these difficult conditions."

Markets concerns remain after repeated rebel attacks in facilities operated by Shell and Chevron in Nigeria, has resulted in the country pumping oil at its lowest level in 25 years — between 1.2 million and 1.5 million barrels a day, representing a reduction of at least 325,000 barrels.

Conflicting reports of a ceasefire and further attacks in Nigeria is adding to the unease in the markets. Militants in Nigeria blew up a key Chevron oil supply pipeline on Saturday, company and military sources said on Saturday. According to industry sources, the U.S. company was forced to shut down operations after the attack in the volatile Niger Delta, halting output by 120,000 barrels per day. Meanwhile, The Anglo-Dutch oil group Shell also said it cannot promise to deliver 225,000 barrels per day for June and July following an raid on it offshore Bonga oilfield.

The news will be assessed by oil traders alongside reports of a easefire declared by the Nigerian miltants, an abrupt change of position, following the attacks and after they had told all foreign oil workers to leave the area on Saturday.

Politicians traded accusations over the cause of the high oil prices at the summit in Jeddah, with oil-producers blaming speculators, and oil-consumers such as the US, suffering from record fuel prices at home, suggesting that robust demand and insufficient supply was to blame.

Meanwhile, Gordon Brown, attending the summit over the weekend, proposed a "new deal” offering oil-producing countries more investment opportunities in Western nations in return for greater access to untapped reserves. The call appeared to be met with a muted response, although Mr Brown said that Qatar and Abu Dhabi had both expressed interest.

Crude oil for August delivery rose almost 1 per cent, or $1.20, to $136.60 a barrel in electronic trading on the New York Mercantile Exchange. Earlier this month, Oil prices reached a record $139.89. Brent North Sea crude for August was $0.94 higher at $135.80 per barrel, after rising $2.86 to settle at $134.86 on Friday.

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