At the start of the week Saudi Arabia vowed to increase its oil production by 8% in an attempt to avert a world economic slowdown. The kingdom’s current OPEC quota is 7.6 million barrels per day, which is to be immediately raised to 9 million and shortly to 10.5 million barrels.

The world’s largest oil exporter had presented the idea to OPEC a little over two weeks ago but was met with a chorus of divided opinion.

Without a general consent from the oil producing cartel there was little chance of an increase in production so now the Saudis have taken it upon themselves to stem the free flowing tide of recent crude prices which peaked last week at US$41.85 per barrel.

However, following a brief dip crude settled back at $41.72 per barrel as traders shrugged off Saudi Arabia's pledge because other OPEC members refuse to formally increase the cartel's daily production quota.

Additionally the combination of tight refining capacity in the United States, strong demand from China and fears that terror attacks could disrupt the global oil supply chain have given traders and speculators plenty of fodder to push prices higher.

The increased turmoil comes as finance ministers of the major industrialised nations met in New York at the weekend to find a way around the growing oil crisis.

Warning that higher energy costs could threaten global prosperity, G8 finance ministers urged the world's oil producers to open the taps on production in order to drive down prices.

"Lower oil prices would benefit the world economy," said the finance ministers in a communiqué issued after a weekend meeting in New York. The ministers were preparing for the Group of Eight leaders summit to be held at Sea Island, in three weeks.

"We now call on all oil producers to provide adequate supplies to ensure that world oil prices return to levels consistent with lasting global economic prosperity and stability, in particular for the poorest developing countries," the ministers said.

Similarly, Saudi Arabia's oil minister said Monday at an energy conference in Amsterdam that he believed $30-$34 per barrel was a "fair and reasonable price" for oil in the United States. He added, though, that OPEC had no plans to change its preferred price range of $22-$28 for its benchmark blend of crudes.

However the Arab kingdom’s independent action was not welcomed by its fellow cartel members who have rebuffed the plan, preferring to make a group decision at OPEC’s next formal meeting in Beirut on June 3rd.

"They can't. It's a mistake. Saudi Arabia can't decide alone to increase production," said Libyan oil minister Fethi bin Chetwane.