In Iraq, the violence between US and Iraqi government forces and the militia loyal to radical Shia cleric Moqtada al-Sadr spilled over into the energy market as oil installations were threatened. Exports from the southern fields have been running well below capacity since early August due to sabotage.

The referendum on the rule of Venezuela’s President Chavez was the other major event moving the market. Prices rose ahead of the 15 August vote on fears of unrest, and fell marginally after Chavez’s supporters claimed victory.

Saudi Arabia’s Petroleum & Mineral Resources Minister Ali Naimi once again assured the market in mid-August that Saudi production could quickly be raised by about 1.3 million barrels a day (b/d). However, US stock data released on 18 August continued to give the impression of dwindling supplies not being sufficiently replenished. Crude inventories registered a draw of 0.4 per cent to 293 million barrels while gasoline stocks fell by 1.2 per cent to 205.7 million barrels. Refinery utilisation is running at 95.8 per cent.