Leading oil producers agreed to raise their output ceiling by some 700,000 barrels per day from July 1st to take the heat off the world crude market.

OPEC secretary general Mr Rilwanu Lukman told a news conference the new output ceiling would be 25.4 million barrels per day, compared with 24.692 barrels per day following an earlier increase in March.

Mr Lukman told a news conference the decision had been taken "with a view to restoring crude oil prices to more moderate levels".

Ministers had already signalled that they agreed on the new output target as they began assembling in Vienna for the full conference of the 11 members of the Organisation of Petroleum Exporting Countries (OPEC).

Analysts said that, although the increase theoretically supplied a further 708,000 barrels per day, in reality the increase would only supply an extra 191,000 barrels.

However, they pointed out that OPEC could continue to over-produce and the new production ceiling did not take into account Iraq that might produce around 100,000 barrels.

Although a member of OPEC, Iraq does not have an official quota because it is subject to UN sanctions.