Arab oil-producing nations came under mounting pressure this week to hike crude production to dispel fears of a shortage in case of a US war on Iraq.
Oil prices have risen close to levels reached after the September 11th attacks last year, well over the $27 mark, in a tense market closely watching the growing threat of US intervention to topple Iraqi President Saddam Hussein.
Weekly inventory figures released by the American Petroleum Institute revealed a fall in crude oil stocks of 6.3 million barrels to 298.9 million in the week to August 30th from the previous week.
The market fears a disruption of oil supply from Iraq, which exports slightly less than one million barrels per day, and doubts the will of the other producing nations to make up for the possible loss.
But Saudi Arabia, the world's top oil exporter, denied on Monday it had decided to press fellow members of the Organisation of Petroleum Exporting Countries to hike output at their meeting due September 19th in Osaka, Japan.
The Middle East Economic Survey weekly said Iraq's cross-border oil trade with Turkey and the Gulf, carried out in violation of UN sanctions, has been reduced to a "trickle".
AFP