VIENNA -- OPEC could hike oil production levels by up to 800,000 barrels per day in a bid to keep down rising prices if Saudi Arabia overcomes its partners' opposition to such a move at the cartel's next meeting on September 19, an OPEC official said Thursday.

The cartel's oil ministers could "decide in September on a moderate increase to give the market some time to absorb it" before making a further decision a further decision on output later in the year, the official said, speaking on condition of anonymity.

Oil prices have climbed to their highest levels for over a year in New York and for five months in London recently on the back of concerns about a possible U.S.-led attack on Iraq and falling levels of oil stocks.

Reference Brent North Sea crude oil for October delivery rose five cents to $27.00 per barrel Thursday in London.

The ministers "need to reach a compromise to release a small amount of crude. It is a very tough decision to make," the OPEC said, explaining that the output hike could be "between 500,000 and 750,000 to 800,000 barrels a day".

He added that Saudi Arabia, by far the biggest and most influential producer within the Organization of Petroleum Exporting Countries (OPEC), was pushing for a production hike but faced opposition from Kuwait, Indonesia and Venezuela.

"I think the momentum is going against the Saudi interests", he said.

However, Algeria and Nigeria have both said they will request increases to their individual output quotas at next month's meeting, which some analysts say would require an increase to the overall output ceiling, AFP reported.

The Saudi stance was primarily political, he said, explaining that the move was a conciliatory gesture towards the United States, with which the kingdom's relations have deteriorated since the September 11 terrorist attacks there.

"Given the high tension between these two allies the Saudis would like to mend bridges with the U.S., to show goodwill," he said.

Reports suggest that OPEC members are already cheating on their agreed production limits.

The OPEC official said the cartel could also decide to do nothing for some time before meeting later this year in November or early December, adding that his own feeling was that they would choose this option.

Traders treated the OPEC comments with skepticism.

"Most people still believe that at the end of the day OPEC will come out with an unchanged quota -- this is the general opinion in the market," said GNI trader Robert Laughlin in London.

While OPEC ministers have pledged to make up any supply shortfall caused by an attack on Iraq, they have also stressed in the past that they will not hike output to offset speculative price pressures.