Saudi Arabia's decision to increase oil production by 300,000 barrels a day in June will not help lower the price of crude, Iraq's oil minister Hussain al-Shahristani claims.

The oil market is "well supplied", he said. Prices are being driven by speculators and not supply and demand.

"Everyone is pumping as much as they can at the moment," he told reporters at the World Economic Forum meeting in Egypt.

"Iraq has added 500,000 barrels over the last six months and it has made no difference."

Saudi Arabia's announcement ahead of a visit by President Bush had little or no impact on prices. It closed that day at a record $126.29 a barrel in New York.

Today, US crude oil for June delivery was up 29 cents at $126.58. That contract expires tomorrow. The more-widely held July contract was at $126.34 a barrel, while July Brent traded 32 cents higher at $125.31.

Oil prices have doubled in the past year on surging demand, supply disruptions in places such as Nigeria and commodity purchases by investors as a hedge against the declining US dollar. The price surge threatens to accelerate inflation and curb global economic growth.

Qatari oil minister, Abdullah al-Attiyah, repeated Opec claims that there is no need for more production or a meeting of the cartel before its next conference in September.