DUBAI, Jan 8: OPEC producers on Wednesday called an emergency weekend meeting to decide how much more crude to pump to prevent a oil price came in the wake of long-running strike in Venezuela and a looming war in Iraq.

The Organization of the Petroleum Exporting Countries said oil ministers will meet on January 12 in Vienna after a 25 per cent rise in prices in the past two months.

Kuwait’s Oil Minister Sheikh Ahmad al-Fahd al-Sabah said ministers were discussing an increase of 1-1.5 million barrels per day, a rise of four to seven per cent on limits now of 23 million bpd.

“There are two proposals. One million barrels per day and 1.5 million barrels a day,” the minister told reporters in Kuwait. “We would favour raising by one million and would agree to 1.5 if necessary.”

OPEC wants to bring prices back inside its $22-$28 target band, a range it feels does not threaten world economic growth.

“The world has tried everything to boost growth without much success and if oil prices stay high we’re in for another year of very slow growth,” said Mehdi Varzi of Dresdner Kleinwort Wasserstein.

Oil has retreated from a peak of $33.65 a barrel for U.S. crude since the end of December when it was first revealed that OPEC was discussing a substantial output increase.

“They’re trying to prevent panic on the oil markets. Most in OPEC are resigned to a war in the Gulf,” said Varzi.

In Vienna, Opec Secretary General Alvaro Silva-Calderon was cautious over the OPEC plan to hike its oil output at an extraordinary meeting on Sunday.

“Any larger increase or cut in output (than 500,000 barrels a day) has to be carefully evaluated within the prevailing circumstances,” Silva-Calderon told the cartel’s Opec news agency in Vienna.

In March 2000, Opec agreed to a price band mechanism under which the cartel would raise output by 500,000 barrels per day if prices remain above the range of 22 to 28 dollars for more than 20 consecutive trading days.

The mechanism also sets out that Opec would cut its output by the same amount if prices fell below 22 dollars for 10 consecutive days.

“It is a difficult situation we are in, since we are dealing with a market affected by a set of extraordinary circumstances that are beyond our control,” Silva-Calderon said.

Sources close to the cartel have said that Saudi Arabia, the world’s leading oil exporter at some 7.5 million barrels a day, is calling for a total output increase of 1.5 million barrels a day.

The Saudi proposal is backed by Qatar, which currently holds the rotating Opec presidency.—Reuters/AFP