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ABU DHABI (Thomson Financial) - The oil market is balanced and there is no need for an increase at Wednesday's OPEC meeting, but all options are on the table, an OPEC delegate based at the cartel headquarters in Vienna told reporters here.

The delegate, who preferred not to be named, said should the cartel choose to hike output, it will not hike by more than 500,000 bpd at most because there is currently oil on the market and no buyers.

'Everyone is offering (oil). There are cargoes and nobody is willing to buy,' he said, adding he does not know what the market would do with an extra 500,000 bpd of oil.

At its last meeting in Vienna, OPEC agreed to hike output by 500,000 bpd, effective Nov 1 this year, however, the increase failed to stop the meteoric rise in prices near 100 usd a barrel.

As a result, OPEC ministers gathering for tomorrow's meeting here have repeatedly stressed that high prices are nothing to do with fundamentals, and that they do not control oil prices.

Rather, it is increased fund buying that has inflated the oil price, while the weakening dollar and geopolitical tensions have also played their part, according to OPEC.

'Market speculators are adding a lot to the (oil) price, about 3-4 usd every day, which is something we haven't seen before,' said the delegate. He added that OPEC is also concerned about a possible recession.

'House prices are collapsing in US ... there is a 40 pct chance, according to Goldman Sachs (nyse: GS - news - people ), for economic an crisis, which means demand for oil will be lower,' he said.

All the same, however, the cartel remains under pressure from consuming nations to hike output in a bid to lower prices and help prevent a recession in the US or globally.

Whether it gives into this pressure one more time remains to be seen, as the cartel's most influential member, Saudi Arabia, has to date stayed tight lipped.

Earlier today, Saudi Arabian oil minister Ali al-Naimi told a group of reporters here that 'all options are open' ahead of tomorrow's meeting in Abu Dhabi.

maytaal.angel@thomson.com

jag/jag

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