Iran said on Saturday that any oil output increase by the Organization of Petroleum Exporting Countries as requested by the U.S. wouldn't affect soaring prices.
"This would only increase inventories," Oil Minister Gholam Hossein Nozari told reporters in reaction to U.S. President George W. Bush pressing OPEC kingpin Saudi Arabia to raise oil output.
"The market is oversupplied and increasing production will not affect prices," the oil minister said when asked whether an OPEC output hike would lower prices.
On Friday, light, sweet crude for June delivery settled up $2.17, or 1.8%, at a record close of $126.29 a barrel on the New York Mercantile Exchange. Earlier in the session, prices surged to $127.82 a barrel, also a new high.
Saudi Arabia said global supply was balanced with demand but revealed that it had increased production by 300,000 barrels per day this month.
Iran is the world's fourth largest oil exporter.
When prices reached $115 a barrel last month Iranian President Mahmoud Ahmadinejad said oil was priced too low and that the commodity "should find its real value."