In their closing communique, OPEC ministers said that their decision to cut 900,000 barrels a day (b/d) from the 25.4 million-b/d ceiling was a return to the status quo before the outbreak of hostilities in Iraq halted exports. Iraqi output has been steadily increasing output over the past three months. Coalition Provisional Authority (CPA) spokesman Charles Heatly told a news conference in Baghdad on 29 September that exports had passed the 1 million-b/d mark and would increase further when sales resumed from the northern Kirkuk fields, scheduled for early November.

OPEC also pointed to the rapid build in crude and product stocks that has been taking place since the end of the US summer driving season. Crude inventories in the US remained unchanged at 280.8 million barrels in the week to 26 September. Record imports earlier in the month have pushed stocks 2.1 per cent higher than at the corresponding point in 2002, putting an end to months of seasonal deficits. Heating oil supplies remained 7 per cent down year-on-year but are gradually increasing, up 2.4 per cent in the same week.

OPEC forecasts that, without output restraint, inventories would build strongly in the fourth quarter and particularly in the first quarter of 2004 at a time when a stock draw is typical, depressing prices.

The organisation made its characteristic call for non-OPEC producers to co-operate in defending the $22-28 price band.

OPEC quotas (effective 1 November 2003)

(‘000 b/d)

Algeria782

Indonesia1,270

Iran3,597

Iraqna

Kuwait1,966

Libya1,312

Nigeria2,018

Qatar635

Saudi Arabia7,963

UAE2,138

Venezuela2,819

Total24,500

na: not available