Oil Producers May Cut Production, Libya Warns

Some oil-producing countries may defy the west by cutting production, Libya warned today, ahead of an emergency meeting of oil producers and consumers in Saudi Arabia.

Shorki Ghanem, the chairman of Libya's National Oil Corporation, told Reuters in advance of the meeting in Jeddah: "Some countries may think of increasing production, but some countries may even think of cutting production."

A move to cut production would fly in the face of appeals by Gordon Brown, George Bush and other western leaders. They have been pressing Opec, the oil cartel, to raise production in an effort to bring down record oil prices.

No Opec members have publicly mooted a cartel-wide production cut, with oil passing through the $135 a barrel mark, although some countries trimmed output during this year's second quarter, when demand from refineries is at its lowest.

Brown, who was flying out to Jeddah today, will press Saudi Arabia and other oil producers to use some of their huge oil profits from the worst "oil shock" in history to invest in renewable energy and nuclear power in the west.

Brown says 30-35% of all electricity generated in the UK will have to come from renewable sources to meet the targets set by Europe to reduce the effects of climate change. "Over the next three years I think we will see large investments in Britain in solar, wind power, wave power, nuclear and in expansion to alternatives to oil," Brown told the Guardian.

But the Opec oil cartel sees little prospect for lower oil prices in the short term.

A senior Iranian oil official said he expected crude prices to rise in coming days with the approach of summer, which will not go down well with motorists in the UK currently forking out £1.20 per liter. But it is the world's poorest who are feeling the brunt of higher energy prices, with riots seen in Haiti and Somalia.

"In coming days we will witness another increase in oil prices," Hojjatollah Ghanimifard, an Iranian official, told the Tehran-e Emrooz daily newspaper.

"As we get closer to the end of the current month and the... summer season oil prices are more likely to rise," Ghanimifard added.

Meanwhile, Iran's Opec governor, Mohammad Ali Khatibi, said: "Currently, Opec does not see a need to boost its production.

However, Saudi Arabia, the world's biggest oil producer and the most pro-western Opec member, yesterday confirmed it would boost production to 9.7m barrels a day next month - its second increase in as many months and its highest production rate in decades.

Besides hinting at a possible cut in oil production by some Opec members, Libya downplayed hopes for decisive action from the Jeddah summit.

"You can't get any decision on important matters in the energy market in a meeting of three hours," Ghanem, said.

Saudi Arabia will press consumer nations to curtail the speculation it sees as a major factor behind high oil prices.

"Governments have a role in organizing oil markets and structuring them in a way that prevents speculators behaving in a manner that has led oil prices to reach their current levels," the deputy oil minister, Prince Abdulaziz bin Salman, was quoted as saying in the Saudi-owned Asharq al-Awsat daily.