June 24 (Bloomberg) -- OPEC and the European Union clashed over record oil prices as producer countries blamed speculators while EU importers called for more crude output.

A supply increase from Saudi Arabia, the world's top oil exporter, won't be matched by additions from other members of the Organization of Petroleum Exporting Countries, the group's Secretary-General Abdalla el-Badri said today.

``The market is currently hijacked by speculators,'' el- Badri said in Brussels, where EU and OPEC officials met for their annual meeting. ``There is no shortage of supply.'' EU and OPEC agreed to study further the impact of financial markets on oil pricing, they said in a joint statement after the meeting.

EU Energy Commissioner Andris Piebalgs said he was ``not convinced'' speculators are to blame and called for OPEC to scrap its production quotas.

Saudi Arabia plans to raise output for a third straight month in July and will pump more as needed to curb record-high prices above $135 a barrel, Saudi Oil Minister Ali al-Naimi told a June 22 summit of 35 producing and consuming countries in the Saudi port city of Jeddah.

The kingdom will increase daily crude output by 200,000 barrels to 9.7 million barrels next month, al-Naimi said. OPEC President Chakib Khelil and ministers from Venezuela and Libya said the Saudi initiative would fail to lower record prices, which they attributed to speculation rather than a lack of crude.

Supply, Demand

``If you look at supply, demand and stocks, for example, they are at a much better level than they were a year ago,'' Khelil, who is also Algeria's oil minister, said in Brussels. ``OPEC has already done what it can do and prices will not come down.''

Brent crude for August settlement rose $1.05 yesterday, after the summit, and was up $1.44 at $137.35 a barrel on London's ICE Futures Europe exchange as of 1:28 p.m. local time today. Oil traded in New York gained $1.10 to $137.84 a barrel.

Aside from Saudi Arabia, OPEC has no plans to raise production because the market is ``full'' of oil, according to el-Badri, also former oil minister for Libya.

``Other member countries, they don't want to increase the production,'' he said today.

The group's next scheduled policy-setting meeting is in September. Algeria will also host an extraordinary OPEC ministerial meeting Dec. 17 in Algiers, Khelil said.

OPEC Quotas

OPEC has an official production ceiling of 29.673 million barrels a day for 12 of its 13 members. Those 12 pumped 29.79 million barrels a day in May, according to Bloomberg estimates, with Saudi Arabia exceeding its allotment to make up for shortfalls from Nigeria and Venezuela.

``There is no need to keep any more ceilings for production,'' the EU's Piebalgs said.

``There is a basic difference between us and OPEC countries'' over the price rally, he said. ``They believe that it's mostly speculation and in my opinion it's more the fundamentals.''

Piebalgs downplayed OPEC's emphasis on the impact of refining bottlenecks on oil markets. ``There are new investments coming and in the medium and longer term, we shouldn't be too worried about refining capacities,'' he said.

French Energy and Environment Minister Jean-Louis Borloo and Slovenian Economy Minister Andrej Vizjak were also present at the Brussels meeting. Slovenia will hand over the 27-nation EU's rotating presidency to France on July 1.

`New Deal'

While attending the Jeddah summit, U.K. Prime Minister Gordon Brown proposed a ``new deal'' with producing nations, offering them investment opportunities in the West in return for greater access to untapped reserves.

Record oil prices are boosting natural-gas and electricity costs for consumers because contracts for wholesale energy supplies are linked to the cost of crude.

In the U.K., ``it is clear that at some point in the future gas prices are going to have to move up'' because of the higher oil-indexed contracts and Asian fuel demand, Centrica Plc Chief Executive Officer Sam Laidlaw told a committee of British lawmakers today.

Jean-Pierre Jouyet, French European affairs minister, estimated that 20 percent of the recent increase in oil prices is a result of speculation. That number ``is still a lot,'' Jouyet told the French Institute for International Relations in Brussels.

Spare Capacity

OPEC says its spare production capacity is about 3 million barrels a day, of which two-thirds is in Saudi Arabia.

Energy analysts see little room for higher production from non-Saudi OPEC members unless disruptions in Nigeria disappear.

Saudi Arabia has second-quarter spare capacity of about 2.02 million barrels a day, while other OPEC members collectively have a surplus of about 820,000 barrels a day, the London-based Centre for Global Energy Studies said in a report yesterday. That includes 360,000 barrels a day in Nigeria, 90,000 barrels a day each in Iran and the United Arab Emirates, 85,000 barrels a day in Venezuela and 48,000 barrels a day in Kuwait, CGES said.

El-Badri told reporters today he was unaware of any planned Kuwaiti production increase. Kuwait said yesterday in a statement published by the Al-Rai newspaper that the country will increase its crude output capacity by 300,000 barrels a day in the second half of 2009.

To contact the reporters on this story: Fred Pals in Brussels at fpals@bloomberg.net; Jonathan Stearns in Brussels at jstearns2@bloomberg.net

Last Updated: June 24, 2008 09:03 EDT