Under the arrangement, OPEC is to increase its overall output of oil by 500,000 barrels per day if the reference price of a so-called basket of oils used as a benchmark by OPEC exceeds $28 per barrel for 20 working days in a row. Under the mechanism, production would be reduced by the same amount if the price of oil fell to less than $22 during 20 trading days.

The Organisation of Petroleum Exporting Countries, had agreed to automatically increase production by 500,000 barrels a day when the cartel's price band is triggered.

OPEC president Ali Rodriguez, who also serves as Venezuela's oil minister, said this week that the output increase will go into effect at midnight tomorrow "if prices remain above $28."

Under the price band mechanism, OPEC increases production by 500,000 barrels a day if its reference crude price stays above $28 a barrel for 20 straight business days. On Friday the market price for a barrel of crude closed at $32.73.

The United States, has argued that the world's growing economy requires more oil to continue its upward trend, has pressured OPEC to boost production. World oil prices hover close to 10-year highs due to increased demand worldwide, refining bottlenecks and tensions in the Middle East.

Concerns of insufficient output and high market prices prompted US Energy Secretary Bill Richardson to meet with Rodriguez recently in Venezuela, where he urged the cartel to increase the flow of oil into the market.

The US assumes the price for crude, between dlrs 22 to dlrs25 a barrel, should be acceptable for both producing and consuming nations. The expected increase would be OPEC's fourth this year, for a total of 3.8 million barrels.