OPEC ministers echoed the analysis. Speculation that the group might reverse their planned 1 November output cut, or at least consider production levels before their next scheduled meeting in December, was quashed. 'The price is over the [$22-28] OPEC basket [but] not by a very high margin,' said Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah on 27 October. 'We will continue to follow prices and we will wait for the December meeting to see what prices will be at that time.'

The view appears to be borne out by US stock data. Inventories have, with occasional exceptions, been gradually rising from week to week since gasoline demand began falling in September. The trend continued in the week to 24 October. Crude stocks climbed 2.1 per cent to 291.8 million barrels, 2 per cent higher than the corresponding period in 2002. Heating oil stocks - a crucial indicator of price patterns in the months to come - are also rising. However, pushing in the opposite direction is the gasoline market, which is unusually tight on high seasonal demand for the time of year.

The OPEC contention that supply fears rather than realities are driving the market is also supported by data from Iraq. Prices spike on events such as the series of suicide bombings that struck Baghdad on 27 October. In the background, however, Iraqi production is increasing steadily. Figures for September show average production up by about 300,000 barrels a day (b/d) from August to 1.3 million b/d.

Oil officials are also signalling that they may not wait for the installation of a sovereign government to invite in foreign firms for development contracts. 'Steps have already been taken to execute a number of oil field development projects, namely in Khurmala and Hamrin oil fields in the north and Subba and Luhais in the south, with a planned total production capacity of 340,000 b/d,' senior Oil Ministry official Thamir Ghadban said in Geneva in late October.