The initial impact on prices of sabotage attacks against both Iraq's northern and - more importantly - southern oil infrastructure on 14-15 June was muted, in spite of the loss of some 1.8 million barrels a day (b/d) of exports. The gradual return to action of the facilities was greeted with equal equanimity by the market. Sales resumed through the attack-blighted Kirkuk-Ceyhan export pipeline on 23 June while, two days earlier, the southern export terminals came back on stream, albeit at reduced capacity.

OPEC added some comfort to the market ahead of its scheduled 2 million-b/d quota boost from 1 July. As data for May production trickled out, not only was it clear that OPEC is already producing at and above that level, but also that those with spare capacity are prematurely turning on the taps. Saudi Arabia produced some 400,000 b/d more in May than in April. OPEC's May monthly report affected shock at recent price levels. 'Since its adoption in 1987, the OPEC reference basket has never come close to the level reached this May [of $36.27 a barrel],' it said. 'Moreover, the daily average for 17 May even approached the unimaginable $38-a-barrel mark.'

Prices were also softened by the expectation and then release on 23 June of weekly US data showing that crude stocks had built once again by 0.8 per cent to 305.4 million barrels, a 7.8 per cent year-on-year increase. On the other hand, gasoline registered a 0.4 per cent draw to stand at 205.1 million barrels, 0.9 per cent lower than in 2003 - itself a tight period. The continued jitters of the market was confirmed when an outage at a major US refinery in Louisiana on 22 June prompted a brief spike in prices. And political unrest from an unusual quarter was also blamed for the rise: striking workers in Norway have cut some 300,000 b/d from the Scandinavian country's production.