The Organisation of the Petroleum Exporting Countries bids this week to pull off a tricky balancing act by raising oil output to satisfy Western demands for lower fuel costs while trying to avoid sending crude prices crashing.

Leading members of OPEC, including Saudi Arabia and Iran, believe oil prices nearing $30 (€31) a barrel are damagingly high.

"Saudi Arabia and the United States share the same goal - they both want oil prices back down to $25 a barrel," said Mr Roger Diwan of Washington's Petroleum Finance Corporation.

Prices have remained stubbornly high despite the seven per cent increase in output sanctioned by OPEC last March after heavy pressure from its biggest customer, the US.

Saudi government sources said Riyadh favours up to an extra one million barrels daily on top of the 24.7 million bpd now assigned to 10 OPEC members.

In public, Saudi oil minister Ali al-Naimi has kept his cards close to his chest, but the betting is that OPEC's top producer will get fellow members on board at a meeting which starts in Vienna tomorrow.

Outside the cartel, Mexico and Norway are expected to announce additional supplies, amounting to a few hundred thousand barrels a day.

The prospect of increased oil supplies was enough to sharply lower crude prices yesterday.

OPEC's task this week will not be easy. Timely oil market data is notoriously unreliable and prone to hefty revisions.

While worldwide crude inventories remain low, industry data shows stocks are building quickly. Most dealers agree that crude prices would be lower were it not for this summer's new environmental rules in the US that restricted the pool of American gasoline supply.

"There is no problem of supply, only of speculation " said OPEC president Mr Ali Rodriguez yesterday.

"The Saudis are going to want to lift production because of their political concerns with the US," said Mr Gary Ross of US consultancy Petroleum Industry Research Associates.