The Organisation of the Petroleum Exporting Countries worries that $70-a-barrel crude could backfire on it by slowing global economic growth and fuelling investment in alternative energy.

Edmund Daukoru of Nigeria, the Opec president, said: "We are not comfortable with prices at such levels because they are not supported by fundamentals and contain within them the seeds of further volatility that ultimately will be to the detriment of all."

Producing at its limits, Opec's leverage in world oil markets is limited.

Refinery bottlenecks, Iran's standoff with the West over its nuclear programme, supply disruptions in Iraq and Nigeria and a rush by investors into commodities have fuelled the price of crude.

Arguments

Ali al-Naimi, the Saudi oil minister, said world oil markets were "oversupplied and overpriced".

Abdullah al-Attiyah, Qatar's oil minister, said: "At this price it is not possible for Opec to propose a cut." 

Al-Naimi: World oil markets are
oversupplied and overpriced

Venezuela had argued that world oil inventories were in surplus and Opec should consider reducing output to prevent a price slump.

Hugo Chavez, the Venezuelan president, in a speech to the oil ministers, accused Washington of trying to destroy Opec, criticised the American way of life as a waste of energy resources, and hailed Opec as a defender of the Third World against imperialism.

Talk like that makes some in Opec uneasy.

Since the 1970s, it has worked hard to avoid politics and build a business-like reputation as a reliable oil supplier.

"Politics is anathema to Opec. They prefer to avoid it at all costs," said consultant Gary Ross of New York's PIRA Energy.

"From their perspective there's no need to politicise oil because it makes their consumers nervous which in turn can lead to policies that reduce or constrain oil demand growth which is not in Opec's national interests."

Profit share

Chavez has championed a campaign for Latin American energy producers to claim a greater share of booming oil profits from foreign investors.

He said Caracas and others in Opec were considering switching some oil sales to euros from dollars to defend against the falling value of the US currency.

Chavez accused Washington of
trying to destroy Opec

Iran said it was already pricing some exports in euros.

Venezuela sells most of its crude to the United States but is planning to double sales to China and exports some crude to Europe through a location swap with Russia.

While Caracas has support from Iran for keeping prices as high as possible, Opec delegates say leading producer Saudi Arabia and others would prefer a $50-$60 range.

Their biggest concern is that energy inflation could trigger a slowdown in global growth and hit oil demand.

So far the economy has proven surprisingly resilient to a rise in oil prices that has added $40 to the value of a barrel in three years since US forces entered Baghdad.