OPEC head Mr Ali Rodriguez insisted today that the organisation of oil producers is unlikely to open its taps, despite warnings that prices could soar to levels which sparked fuel protests last year.
But he said the (OPEC) which meets in Vienna on June 5th, could increase production in coming months either by an automatic mechanism or at a special meeting if prices continue to rise.
Crude prices have fluctuated over the last two years, dipping below $10 a barrel in 1999 before soaring above $35 last year, the highest levels since the 1991 Gulf War.
Analysts say the recent rally in prices was due to continued tightness in the US gasoline market and rising tension in the Middle East.
OPEC has a price-band mechanism which automatically increased output if prices stayed high, and insisted it would also be triggered if necessary.
Today's OPEC benchmark price, based on a combination of seven crudes, stood at $27.23 dollars, near the top of its $22-28 dollar range.
In another worrying development today, Iraq renewed its threat to halt oil exports under a UN oil-for-food programme if the security council amends the humanitarian scheme.
The oil-for-food scheme, implemented after the Gulf War, comes up for renewal in June.
"Iraq will no longer sell its crude on the basis of the oil-for-food programme if it includes the American ideas" for a system of "smart" sanctions, said Iraq's Deputy Prime Minister Mr Tareq Aziz, in Baghdad.