Oil prices retreated from close to record highs today after OPEC agreed to raise production by 500,000 barrels a day.

A rift developed in advance of a crucial OPEC meeting today when Saudi Arabia said it would go-it-alone if its plan to increase production to counter price rises is rejected.

A Saudi proposal to hike OPEC’s oil production ceiling to bring it in line with real output appeared to be losing favour today, with Libya’s oil minister saying most members were opposed.

OPEC oil ministers today joined in supporting a cut in output toward production target levels early next year in a bid by the organisation’s 11 member states to stave off further falls in the world price while trying to avoid a new frenzy of buying.