``We should wait before making any judgments. Now it is premature. The issue of the impact of Iraqi exports has not been settled. OPEC will wait until the issue is clear then they will make the needed consultations to act if there is a need to,'' the Gulf source told Reuters. ``We will make a decision in March.''

He said said Saudi Arabia, which spearheaded the latest round of global oil production cuts last March, believes speculation was behind the latest oil price rally. ``These fluctuations are due to expectations and speculation. Oil producers deal with fundamentals,'' he said one day after market nerves were on edge over the duration of Iraq's oil export suspensions triggered by a spat with the United Nations. International benchmark Brent crude settled on Tuesday at $25.15, down 63 cents, and 75 cents below a post-Gulf War high of $25.90 reached on Monday.

Oil traders hit the sell button after United Nations sources said Iraq would accept a six-month roll-over of the 180-day humanitarian oil sales package on terms similar to those currently in effect.

Iraq's signal on Tuesday that it would agree to the six-month renewal came after it said on Monday it was stopping exports to protest what it saw as a US attempt to prolong UN-imposed sanctions after Baghdad's 1990 invasion of Kuwait.

But Iraq's UN envoy Saeed Hasan denied he had given a definitive answer to anyone, and would do so after the Security Council decides on the issue. Meanwhile traders struggled to assess just how long Iraqi barrels might be removed from the market. Baghdad is removing about five per cent of global trade from the market at a time when world oil stocks are running low as the northern hemisphere moves into peak winter demand season. But OPEC officials remain cautious, saying long-term questions over stockpiles and price stability must first be settled before a shift in production policy is decided.

On Tuesday, Iran's OPEC governor Hossein Kazempour Ardebili told Reuters his country was unconcerned about the surge in crude prices because the average price this year was still too low for producers.

He said there was growing support among member states of the Organisation of Petroleum Exporting Countries to not impose any new production hikes until at least the third quarter of 2000. But an OPEC delegate said on Wednesday the group was not currently moving towards any new production policy and would not make a decision until supply curbs expire at the end of March.