Oil prices held firm on Wednesday, underpinned by worries about tightening heating oil supplies in the West.
Brent crude LCOc1 in London was down just 13 cents at $30.56 a barrel, holding within a dollar of post-Iraq war peaks touched on Friday. New York crude futures CLc1 were down 14 cents at $31.68.
Prices have rallied $5 or 20 percent since OPEC surprised oil markets last month by cutting production by 3.5 percent ahead of the northern winter, spurring a wave of buying by speculative hedge funds.
"Things are pretty overbought, with most commodity complexes inflated by fund money. Sooner or later, many of these itchy fingers will have to reel in their profits, but probably need some fundamental justification before doing so," said Edward Weir of Man Financial in a report.
Kuwaiti Energy Minister Sheikh Ahmad al-Fahd al-Sabah said the high prices were temporary.
"The current increase in prices is temporary and we have to follow up the situation," he told reporters, echoing similar comments from Indonesia's Oil Minister Purnomo Yusgiantoro, who is due to take over as OPEC president in 2004.
The Organization of the Petroleum Exporting Countries decided to cut output from November 1 because it believes international supplies will swell as Iraqi production recovers and Russian output rises.
OPEC meets again on December 4. "Funds look very unlikely to short this market in the face of another round of OPEC cuts in December," said William Buchanan of Standard Bank.
Iraq is ramping up production following the U.S.-led invasion in March, although progress is being hampered by looting and sabotage.
Iraq's interim trade minister, Ali Allawi, said on Wednesday in Canberra he expected Iraq's oil production to reach 3.5 million barrels per day by next year from around two million bpd now. The minister is traveling to gather support for the reconstruction of the country.
But oil dealers said the potential downside for prices would be limited by worries about falling heating oil stocks in the key consuming regions of the United States and Europe.
U.S. heating oil inventories and European stocks of heating and diesel fuel are below year-earlier levels, according to government agency reports last week.
U.S. government data on Thursday, covering last week, are expected to reinforce concerns about tightening stocks of heating oil in the world's biggest energy market.
Analysts estimated U.S. distillate stocks, including heating oil, fell one million barrels to 130.5 million following a cold snap that hit the U.S. northeast, the biggest regional consumer of heating fuel in the world.
The data are expected to show crude stocks rose 1.7 million barrels to about 288 million barrels.
Brent crude LCOc1 in London was down just 13 cents at $30.56 a barrel, holding within a dollar of post-Iraq war peaks touched on Friday. New York crude futures CLc1 were down 14 cents at $31.68.
Prices have rallied $5 or 20 percent since OPEC surprised oil markets last month by cutting production by 3.5 percent ahead of the northern winter, spurring a wave of buying by speculative hedge funds.
"Things are pretty overbought, with most commodity complexes inflated by fund money. Sooner or later, many of these itchy fingers will have to reel in their profits, but probably need some fundamental justification before doing so," said Edward Weir of Man Financial in a report.
Kuwaiti Energy Minister Sheikh Ahmad al-Fahd al-Sabah said the high prices were temporary.
"The current increase in prices is temporary and we have to follow up the situation," he told reporters, echoing similar comments from Indonesia's Oil Minister Purnomo Yusgiantoro, who is due to take over as OPEC president in 2004.
The Organization of the Petroleum Exporting Countries decided to cut output from November 1 because it believes international supplies will swell as Iraqi production recovers and Russian output rises.
OPEC meets again on December 4. "Funds look very unlikely to short this market in the face of another round of OPEC cuts in December," said William Buchanan of Standard Bank.
Iraq is ramping up production following the U.S.-led invasion in March, although progress is being hampered by looting and sabotage.
Iraq's interim trade minister, Ali Allawi, said on Wednesday in Canberra he expected Iraq's oil production to reach 3.5 million barrels per day by next year from around two million bpd now. The minister is traveling to gather support for the reconstruction of the country.
But oil dealers said the potential downside for prices would be limited by worries about falling heating oil stocks in the key consuming regions of the United States and Europe.
U.S. heating oil inventories and European stocks of heating and diesel fuel are below year-earlier levels, according to government agency reports last week.
U.S. government data on Thursday, covering last week, are expected to reinforce concerns about tightening stocks of heating oil in the world's biggest energy market.
Analysts estimated U.S. distillate stocks, including heating oil, fell one million barrels to 130.5 million following a cold snap that hit the U.S. northeast, the biggest regional consumer of heating fuel in the world.
The data are expected to show crude stocks rose 1.7 million barrels to about 288 million barrels.
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