"Oil prices, there is a common understanding that has nothing to do with supply and demand," al-Badri said on the sidelines of an energy conference in Rome on Sunday.

Oil prices reached a new high on Friday at USD117 a barrel.

A host of supply and demand concerns in the U S and abroad, along with the dollar's weakness, have served to support prices, even as record retail gasoline prices in the US appear to be dampening demand.

Crude prices have risen as much as four percent last week.

The OPEC chief said OPEC "will not hesitate" to increase production if the group thought the higher prices were due to shortages.

But he said more oil will not solve the high prices.

OPEC's production levels were just one of many factors, he said.

"But how much higher it will go, of course it depends on a number of things: the political situation, whether there is a natural catastrophe, whether there are speculations in the market, whether there are strikes in certain producing countries. So there are many other factors other than OPEC production," al-Badri said.

Oil producers reject raising output

Oil-producing countries have rejected calls to raise output amid record prices -- five times higher in as many years -- saying the rise in demand was artificial.

Kuwait's acting oil minister said on Monday that supply and demand factors are not to blame for the soaring price of crude oil, which reached fresh highs last week.

Oil prices hit record highs above 117 dollars per barrel in New York, following a pipeline attack in Africa's biggest producer Nigeria.

"The level of stockpiles does not currently affect prices on the world market," Mohammad al-Olaim said on the sidelines of an energy forum in Rome attended by oil-producing countries, companies and consumer nations.

"The fundamentals do not affect the market," he said.

"If there is a need to raise" production, ministers of OPEC -- of which Kuweit is a member -- "will make a decision," he added.

Organisation of the Petroleum Exporting Countries (OPEC) president Chakib Khelil, currently touring Kuwait, echoed him, saying there was no need for an immediate hike in production.

He said the cartel "does not need to raise output in the near future," according to Kuwait's KUNA news agency.

"Today there is no need to get worked up and say, 'We must put more oil on the market', because the demands of oil consumers are probably motivated by political reasons," said Saudi Oil Minister Ali-al Naimi.

"We have raised output over last year and the prices have continued to climb," he told the Petroleum Argus, an oil industry weekly.

Source: DDNEWS