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The Organization of Petroleum Exporting Countries, supplier of more than a third of the world's oil, may scrap an increase in oil-output quotas set for Aug. 1 because of falling prices, officials from the group said.

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The Organization of Petroleum Exporting Countries, supplier of more than a third of the world's oil, may scrap an increase in oil-output quotas set for Aug. 1 because of falling prices, officials from the group said.

Oil has slid 16 percent to $36 a barrel in New York since the group in early June agreed to boost output targets by 2 million barrels as of July 1, with another increase of 500,000 barrels to occur on Aug. 1. Saudi Arabia's oil minister, Ali al-Naimi, said prices have reached a "fair" level, and Nigeria's top OPEC official said raising quotas in August may be a mistake.

"To put the next tranche into the market would be precipitous in my view," Edmund Daukoru, adviser to Nigeria's president on oil, told reporters on the sidelines of a conference in Bagshot, England. "With these kind of drops in prices, we'd be foolish not to take account of that."

OPEC's June accord came a day after New York crude peaked at $42.45 a barrel, the highest in more than two decades of futures trading. Oil prices surged as demand jumped in China, sabotage of Iraqi pipelines limited supplies and attacks on Westerners in Saudi Arabia raised concern of potential disruptions there.

Maizar Rahman, Indonesia's OPEC governor and the acting secretary general at OPEC's headquarters in Vienna, said in a phone interview that the August increase will be reviewed at the group's July 21 meeting. The minister for Saudi Arabia, the world's largest oil exporter, joined colleagues Iran, Nigeria and Venezuela in signaling that the measure may be shelved.

New York crude was up 44 cents at $36.10 a barrel at 3:40 p.m. London time. In London, Brent crude oil gained 51 cents to $33.62 a barrel.

'No Justification' for More

"The current prices are fair, and there's no justification to take any step whether to decrease or increase the production," al-Naimi told reporters in Riyadh, the state's official news agency reported. "The stability of the oil price must be maintained to protect the stability of the international economy."

OPEC's quota rises to 25.5 million barrels a day tomorrow under the June accord. While figures published by OPEC show members are already pumping more than that, a further rise in the official quota would still influence prices, Daukoru said.

"We have to be cautious," he said. "Everybody's supplying a little bit above the quota, but to again further legitimizes another tranche, it would definitely affect the market."

Saudi Arabia intends to pump 9.1 million barrels a day next month, in line with its June plan and up 500,000 to 600,000 barrels a day from May, the Saudi Oil Ministry has said. Most of OPEC's 10 other members are pumping near their limits to capture the high prices and refill inventories.

Nigeria, OPEC's fourth-largest producer in May, is producing about 2.5 million barrels of oil a day, Daukoru said. The nation holds an extra 300,000 barrels a day of capacity that can't immediately be brought on stream, he said.