US stocks built strongly in the week to 24 October, which caused prices to slide. Data released on 5 November showed static crude supplies of 291.9 million barrels and a draw on heating oil - a more normal position for the time of year. Products rather than crude are driving the market, with the focus on heating oil as winter approaches.

However, gasoline demand has been increasing, with demand more than 200,000 barrels a day (b/d) higher than the seasonal average, keeping supplies tight. Some traders view this as a sign that economic recovery in the US is beginning to filter through to energy demand. Prices spiked on 31 October when government data showed that the economy surged 7.2 per cent in the third quarter.

OPEC's 900,000-b/d cut was due to take effect from 1 November. Already debate is hotting up over what the group should do at its December meeting. The International Energy Agency (IEA) has unsurprisingly criticised the decision to go ahead with the November cut, pointing to prices at or above the $28 a barrel level throughout the preceding months. More unusually, Moscow on 3 November called on OPEC to increase supplies. 'We are telling OPEC that an urgent production boost is needed to bring prices down at least to $24-25 a barrel,' Energy Minister Igor Yusufov told a news conference.

GCC oil ministers held discussions on 2 November, after which Saudi Petroleum & Mineral Resources Minister Ali Naimi reassured consumers that the target price remained unchanged. 'We are after a price of $25,' he said. 'We have been successful over the past four years to obtain that and we will do our best to keep doing so.' The soothing words followed a call from Caracas to raise the target band.

The news from Iraq in early November was poor. An oil ministry source was widely quoted as saying that the main northern export pipeline would not reopen for at least another two-three weeks, precluding a restart of sales from the Kirkuk fields. Mohammed al-Jibouri, a senior official at the State Oil Marketing Organisation, said on 4 November that output targets for 2004 depended on the northern restart. 'We hope to finalise a base Basra Light contract volume of 1.5 million b/d for 2004,' he said. 'But we still have no Kirkuk and that makes it really hard to envisage when we will reach the 2 million mark.'