Oil prices eased this afternoon after Opec's largest producer, Saudi Arabia, suggested it could unilaterally raise production in an effort to calm the market.

As global oil prices continue to hover close to all-time highs, all eyes are on the oil cartel’s ministerial meeting tomorrow in Isfahan, Iran. Today when asked whether his country was prepared to move alone to pump more oil, the Saudi oil minister, Ali al-Naimi said: "We have done many things in the past. We will do what we have to do."

The minister recently said that he expects oil prices to remain between $40 and $50 a barrel for the foreseeable future.

In early afternoon trade, Brent crude futures were flat at $53.67 a barrel, down from an intraday high of $54. In New York, US futures were flat at $54.96.

Despite the lull in trading, it appeared that a gap was opening up between the Saudis and the oil cartel's more hawkish members.

"There’s mostly a consensus not to increase by 500,000 barrels a day at this time," Fathi bin Shatwan, the Libyan oil minister, said.

Even if accepted, traders noted, an agreement among the 11 members to increase production above Opec's official ceiling of 27 million barrels a day would have mostly a psychological impact as the cartel is already producing about 700,000 barrels more than its official ceiling.

The International Monetary Fund has already issued the chapter of next month’s World Economic Outlook in which it calls for Opec to provide "much better protection" against price spikes by increasing its spare capacity from about 2 million barrels a day to between 3 million and 5 million barrels.

But Algeria's oil minister Chakib Khelil reflected widespread pessimism about the proposal to raise output, telling reporters: "We can do a goodwill gesture, but it doesn’t mean anything in reducing prices."

Investec analyst Bruce Evers said: "There is nothing to stop Saudi Arabia in making a unilateral move to raise production," adding, "there is a lot of hot air coming from Opec.

"The sensible thing to do would be for Opec to do nothing for now and monitor the situation on a week-by-week basis," he said

Analysts also point out that oil refineries, already stretched to capacity, would prefer extra supplies of "sweet" crude - rather than the "sour", sulphurous oil produced by Saudi.

"I think the thing is not so much supply, but demand," said Lee Fader, a trader for ABN Ambro in New York. "If demand stays strong, it could use up that oil very quickly."

Earlier this week, the International Energy Agency (IEA) increased its global consumption forecasts again. The West’s leading energy forecaster said that growth in the Chinese and US economies had proved more resilient than expected.

As a result, the forecaster said that it had raised the estimates of global oil consumption growth by 290,000 barrels a day to 1.81 million bpd, for total demand of 84.3 million bpd.

The revised forecasts means that the IEA has added 500,000bpd to its growth forecasts over the past three months.

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