Oil price undented by output hike

US oil prices held firm near $41 on Friday on concerns that with global output stretched almost to its limit, any production hiccup would leave supplies vulnerable to major disruption.

Not even OPEC's latest decision to cancel a policy meeting next week and go ahead with a 500,000 barrel a day (bpd) rise to official production limits has been able to push down prices, which are less than $2 below a 21-year peak of $42.45.

And another pipeline attack in Iraq has choked off 300,000 barrels a day.

Opec, which has already raised its daily supply quota by 2m barrels, said it would raise this to 2.5m from 1 August, taking it to 26m. Experts say it is already unofficially pumping nearly 27m barrels daily, and market prices are still running away.