The United Arab Emirates ' oil production capacity should increase to about 3 million barrels a day by the end of the year, the country's OPEC Governor said on Monday.

According to a Dow Jones Newswires survey, the U.A.E. produced on average 2.61 million barrels a day in August.

Asked if the U.A.E. is on track for output to hit 3 million barrels a day by the end of 2012, Ali Obaid al-Yabhouni told reporters in Dubai: "Yes, around 3 million."

Earlier Monday, Mr. al-Yabhouni told a conference that hedge funds are playing a de-stabilising role in crude oil markets.

"The issue of manipulation or whatever is causing volatility away from the market fundamentals of supply and demand. There is an agreement (unspoken) between producers and consumers that there is a need for regulatory intervention," he said.

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