OPEC, the oil producers' cartel, has said it might increase oil production this year if prices continue to rise.
Angolan Oil Minister Jose Botelho de Vasconcelos, who is also the present president of OPEC, said oil prices of between $US75 and $US80 per barrel were at an optimum level for both consumers and producers.
However, he said that any further rise towards $US100 threatened to sabotage the nascent global economic recovery. "I think a balanced price is always better. You know that, if necessary, some countries are open to injecting more oil into the market and that will be done. We need to maintain the balance."
The comments echo similar recent remarks from OPEC secretary-general Abdalla Salem el-Badri.
Neil Atkinson, an analyst at KBC Market Services, said: "If the oil price continues to rise in the next week or two, there is a danger economic recovery will be strangled at birth."
He said the OPEC cartel, which pumps about a third of the world's oil, might consider stemming the rise by boosting production at its next meeting on December 22 in Luanda, the Angolan capital.
New figures this week showed China's apparently unquenchable thirst for oil had grown at its fastest pace in more than three years last month as the country's economy continued to recover. Chinese crude demand increased by 12.5 per cent during September -- the fastest rate of increase since June 2006 -- to 8.17 million barrels per day.
The rise of 460,000 barrels per day compared with demand in August was the sixth consecutive monthly increase.
Last week, global crude prices hit their highest level for more than a year at $US82 per barrel. The figures showing China's booming demand for crude emerged as BP was preparing to unveil third-quarter net profits overnight that were expected to be down 60 per cent on the same period a year ago, at about $US3.2 billion.
Tomorrow, Royal Dutch Shell, BP's Anglo-Dutch rival, is expected to report a 70 per cent fall in profits to $US2.5bn.
The pick-up in oil demand from China tracked a rise in Chinese car sales of nearly 84 per cent last month from a year earlier to a new high at 1.02 million units, according to China's Association of Automobile Manufacturers.
China is the world's second-largest oil market after the US, which consumes just over 19 million barrels per day. However, American demand remains sluggish, according to figures from the US Energy Information Administration.
The price of oil was weaker yesterday. In London, a barrel of Brent crude for December delivery fell $US1.66 to $US77.26 on the ICE Futures exchange. A barrel of US benchmark crude for December delivery fell $US1.82 to $US78.68 on the New York Mercantile Exchange.
Weaker oil prices this year are putting pressure on oil companies to further trim spending plans.
Fred Lucas, a Cazenove oil analyst, said BP's management might use today's results to hint at the potential for lower capital expenditure in 2010.
