Nov. 1 (Bloomberg) -- OPEC's decision to increase oil production, which took effect officially today, is failing to stop surging oil prices because there is no real supply shortage in the market, the group's ministers said.

The Organization of Petroleum Exporting Countries doesn't ``believe there is a strong demand for crude,'' Qatari Energy Minister Abdullah bin Hamad al-Attiyah said today in a telephone interview from Japan. The group would ``jump anytime when we feel there is a shortage,'' he said.

Oil rose to $96.24 a barrel earlier today, a record since New York futures began trading in 1983, after U.S. crude inventories unexpectedly fell to a two-year low and the economy expanded at the fastest pace in more than a year. December crude subsequently fell and traded at $92.43 at 2:11 p.m. London time.

The 12-member group decided on Sept. 11 to raise output by 500,000 barrels a day starting from Nov. 1. The increase brought the target output for 10 members, excluding Iraq and Angola, to 27.2 million barrels a day, which is about 320,000 barrels a day higher than September output, according to Bloomberg estimates.

The extra oil ``hasn't worked'' and a further 500,000 barrel- a-day wouldn't help ``cool'' the market either as more refinery capacity is needed, OPEC President Mohamed al-Hamli said two days ago at an oil conference in London. Al-Hamli is also the oil minister of the United Arab Emirates.

Prices have gained as promises of more production from the group have been overshadowed by political tensions between Iraq and Turkey, futures market speculation and demand for refined products. Prices have also advanced with gold and other commodities as investors seek a safe haven following the U.S. dollar's decline and defaults in the U.S. subprime-mortgage market.

See Results First

OPEC members must ``see the results'' from their output increase before making another production decision, al-Attiyah said. The group will meet at a heads of state summit in Riyadh, Saudi Arabia, on Nov. 17-18, and then again for a ministerial policy-setting meeting in Abu Dhabi on Dec. 5.

The European Union's top energy official, Energy Commissioner Andris Piebalgs, said OPEC should increase production to ease concern about supply disruptions.

The market ``needs to be assured that there is sufficient spare capacity,'' Piebalgs said in an interview yesterday evening in Egypt's Red Sea resort of Sharm El Sheikh. ``There is no obvious reason for having $100 a barrel, the market is reasonably well supplied.''

Some members, including Iran and Nigeria, have already called on OPEC to resist such pressure. A change in production targets at the Riyadh summit is unlikely because ``there is enough oil in the market,'' Iran's acting oil minister, Gholamhossein Nozari, told reporters today in Assaluyeh, Iran.

Resisting Pressure

OPEC shouldn't succumb to pressure to raise output because prices are ``not too high,'' said Nigerian Minister of State for Energy (Power) Fatima Ibrahim.

``The prices are high, but not too high, if we take into consideration the appreciation of the dollar and inflation,'' Nigeria's Ibrahim said today in an interview in Sharm el-Sheikh. ``There is tacit pressure on OPEC but OPEC shouldn't yield.''

Prices of more than $100 a barrel may slow global economic growth, said the oil minister of Yemen, which is not within OPEC.

OPEC should ``increase output at their next meeting to stabilize or reduce'' oil prices, Yemeni Oil Minister Khaled Bahah said in an interview today in Dubai. ``The rapid rise of oil prices is shocking the market.''

To contact the reporter on this story: Glen Carey in Dubai at gcarey8@bloomberg.net Maher Chmaytelli in Sharm El Sheikh at mchmaytelli@bloomberg.net

Last Updated: November 1, 2007 10:15 EDT