VIENNA, Sept 19: Opec ministers meeting here on Monday were set to increase the supply of crude oil as required by a market still reeling from Hurricane Katrina, president Sheikh Ahmad Fahd al-Sabah said.

A proposal to make an extra two million barrels per day (bpd) available if needed had met with approval by ministers of the Organization of Petroleum Exporting Countries gathered in Vienna for a two-day meeting, he added.

“I think we will reach a resolution for the two million,” Sheikh Ahmad told reporters. “Nobody is against this proposal, it’s only (a question of) how we will offer it.”

Opec ministers were exploring ways to ease oil prices that, while below recent record highs, are now hitting economies around the world.

In Washington, US President George W. Bush said: “I want to welcome the comments of Opec and non-Opec nations talking about making sure they get enough supply on the markets to help, hopefully, affect the world price of crude oil”.

Sheikh Ahmad told reporters that Opec was offering “all our extra capacity” to the market.

Saudi Arabian Oil Minister Ali al-Nuaimi, a key Opec figure, said of the proposal: “That is the benefit of spare capacity. We used it in 1990, we used it in 2003 and we are ready to use it at anytime time to satisfy the market.”

On Tuesday, Opec’s market monitoring committee will recommend making the extra two million bpd available to markets, Nigerian presidential oil advisor Edmund Daukoru had said earlier.

“I am 90 per cent sure” the proposal would be approved, Sheikh Ahmad added.

He predicted that placing the extra crude oil on call would stabilize prices, which are currently stuck above $60 a barrel.

Another option initially mooted was to raise the cartel’s official output quota by 500,000 bpd, but Sheikh Ahmad said that would not be necessary.

“If we have the two million available for the market if there is a call, there is no need to raise the ceiling,” he said.

Opec was under pressure from oil importing countries to help curb soaring energy costs, but cartel members have argued that it is not the supply of crude but a lack of refining capacity that was at the root of the high prices.

Oil hit a record of $70.85 in New York on August 30 after Katrina seriously damaged production and refining sites along the Gulf of Mexico.

“The problem of high prices is out of reach of the Opec, the problem is because of the limited refinery capacity,” Libyan Energy Secretary Fathi Hamed bin Shatwan said.

However, that view, shared by many Opec colleagues, could be challenged in an International Monetary Fund report to be published in Washington on Wednesday, a copy of which was obtained by AFP here.

The draft IMF report noted that little investment had been made over the past two decades in oil infrastructure but said it was hard to make the case that refinery bottlenecks were the major cause of high crude prices.

“Refining capacity restraints, while contributing to perceptions of tight market conditions, mostly affect product rather than crude oil prices,” the document said.

“An absolute global refinery bottleneck should constrain the demand for crude oil. This should, if anything, cap upward pressures on crude oil prices.”

Increased output by Opec members over the past two years failed to soften the impact of what some call a third “oil shock” following those of 1973 and 1979 and has left the cartel with little spare production capacity, the IMF said.—AFP