New York crude oil futures may fall this week as increased OPEC production spurs oil and petrol supplies, according to a survey of traders and analysts.

Twenty-six of 58 respondents in the survey, or 45 per cent, predicted that crude-oil futures would fall. Nineteen said prices would rise and 13 expected little change.

A week ago, 43 per cent of survey participants were bearish.

OPEC, or the Organization of Petroleum Exporting Countries, which pumps more than one-third of the world's oil, decided on June 3 in Beirut to raise production quotas.

The prospect of more OPEC oil has helped push futures prices down by about 9 per cent from the peak the day before the decision and has blunted the effect of sabotage in Iraq that shut its tanker terminals.

"OPEC is increasing production every day and asking non-OPEC countries to increase to maximum output," said Mark Waggoner, president of Excel Futures Inc in California. "Geopolitics will always play a part, but only in the short term."

Oil for July delivery rose 1 US cent to US$38.45 a barrel on the New York Mercantile Exchange in the week through Thursday and traded at US$38.67 at 12:16 pm in Singapore on Friday.

Futures peaked at US$42.45 on June 2, the highest since New York trading began in 1983.

US crude-oil supplies rose 800,000 barrels to 302.9 million in the week ending June 11, the highest since August 2002, the Energy Department said on Wednesday. Inventories have risen in 13 of the last 16 weekly reports from the agency.

Production targets for the 10 OPEC members with quotas, all except Iraq, rise by 2 million barrels a day to 25.5 million on July 1 and by a further 500,000 barrels a day as of August.

Some OPEC members, including Saudi Arabia, have promised output higher than their quotas.

Saudi Arabia, the world's biggest oil exporter and OPEC's most influential member, plans to pump 9.1 million barrels of oil a day this month.

It pumped 8.65 million barrels of oil a day in May, according to Bloomberg data.

The United Arab Emirates, OPEC's sixth-largest producer, will increase its oil output by 200,000 barrels a day this month, an oil ministry official said last week.

OPEC President Purnomo Yusgiantoro said on Wednesday that the group would ask oil-producing countries including Russia and Mexico to lift output in a bid to lower prices.

Most of the countries said they may not have the capacity to pump more oil.

"Output by some of the non-OPEC countries is also limited by capacity," Purnomo told reporters in Jakarta.

"Most OPEC member countries are producing at their maximum capacity. Only one or two countries in OPEC have spare capacity.

"But I think the constraints that we see today are mainly in the short term."

US imports of crude oil have averaged 10.5 million barrels over the past four weeks, according to Energy Department data. That is about 3 per cent higher than a year earlier.

The rise in US crude oil inventories was less than the median forecast among 12 analysts polled by Bloomberg News. Petrol stockpiles declined by 500,000 barrels last week to 205.9 million. Analysts had expected an increase of 1.25 million barrels, according to the survey median.

Analysts who expect rising prices cited the disruption of Iraqi oil exports. Attacks on pipelines in southern Iraq last Monday and Tuesday stopped oil flows to Iraqi terminals on the Persian Gulf for the second time in less than six weeks.

"Crude and gasoline will rise," said Carl Larry, associate director of energy futures at Barclays Capital Inc in New York.

"There will be trouble in the Middle East. Regardless of where, we will see a spike in prices that will push crude over US$40, and with that gasoline will follow."

The Basra and Khor al-Amaya terminals, which can process about 1.6 million barrels a day, were responsible for 90 per cent of Iraq's exports.

On Wednesday, gunmen killed the chief of security for the North Oil Co, which operates Iraq's northern fields.

(China Daily 06/21/2004 page12)