London - The world's top oil producers and consumers convene in Saudi Arabia today to discuss record-high oil prices, with some Opec members baulking at consumer demands for more crude.

While Saudi Arabia, the world's biggest oil exporter, was widely expected to announce an output hike at the meeting in Jeddah, Opec president Chakib Khelil slammed consumer demands for a production increase to take the pressure off soaring prices.

'To ask the oil producers to increase their output is illogical and irrational,' he said.

If computer or car prices were high, 'would one ask their producers to make more?' he asked.

He insisted again that the oil price was being driven higher by factors other than supply alone - most notably speculation and a falling US dollar.

Another Opec power, Iran, said on Friday that increasing output would not dampen skyrocketing oil prices, which on Monday soared close to US$140 (S$190) a barrel.

Saudi Arabia has indicated it has plans for a production hike of 200,000 barrels per day, but it has not said when the additional production would begin.

The 13 countries of the Organisation of the Petroleum-Exporting Countries pump 40 per cent of the world's oil.

Soaring prices, which ramp up the cost of petrol, jet fuel and domestic energy supplies, are pushing inflation to record levels.

That in turn has forced central banks to be cautious in cutting interest rates - a move needed to power economic growth that is already hurt by the global credit crunch.

As many as 38 countries, four international organisations and 30 oil companies will be attending today's gathering.

Countries being represented include Britain, the United States, France, Germany and China - which accounts for about 40 per cent of the recent growth in global oil consumption.

One oil-producing country that is seeking to increase its production is Iraq, which has the third-largest oil reserves in the world.

It is planning massive development as part of an objective to more than double its current production of 2.5 million barrels per day.

But analysts have warned that raising output can keep prices down only in the short to medium term.

'The hike in output does nothing to address the longer-term expectation for an increasingly tighter market as supply continues to fail to keep up with demand,' said Mr Michael Davies, an analyst at Sucden, a commodities, financial futures and options broker in London.

Another factor that could affect the global oil situation is the threat of Israel carrying out an attack on Iran's nuclear facilities.

US officials recently said Israel had carried out a large military exercise - apparently a rehearsal for a potential bombing of Iran's nuclear facilities.

Such an attack, warned the United Nations nuclear watchdog's chief, would destabilise the Middle East and prompt Teheran to launch a crash course to build nuclear weapons.

'A military strike, in my opinion, would be worse than anything,' said International Atomic Energy Agency director-general Mohamad ElBaradei.

'It would turn the region into a fireball.'

AFP, Reuters