Some decision related to fuel prices in Malta seemed nearer yesterday as international oil prices hovered above $53 per barrel.

Prime Minister Lawrence Gonzi said on Sunday that the government would be forced to take "measures" if oil prices remained high, though he declined to give details.

Dr Gonzi had said that the government was trying to shoulder the burden as much as possible but the indications did not show there would be a drop in the price of oil. He said the oil prices were going up due to higher demand, and this was affecting the most important industries in Malta.

Reuters reported yesterday that spare production capacity among OPEC members has been eroded this year by strong demand growth from China and elsewhere, leaving the global market little flexibility to cope with the type of disruptions now dragging on in the United States.

David Thurtell at Commonwealth Bank of Australia in Sydney was reported by the agency as saying: "The main driver these days is the fact that world spare capacity is so low.

"It's never been this low and that means that we're in uncharted territory."

Reuters also said that about 475,000 barrels per day of US Gulf of Mexico oil production remained out of commission, nearly four weeks after Hurricane Ivan struck the region.

Nigeria also remained a worry after repeated threats to its production, starting with a warning by delta rebels two weeks ago followed by a two-day oil unions strike at leading producer Royal Dutch/Shell Group late last week.

Saudi Arabia, the only country with significant spare capacity, sought at the weekend to dispel worries over the waning spare supply cushion, reiterating that it would keep a reserve of up to two million bpd capacity to meet future growth.

With oil prices extending this year's rally well above $50 a barrel, a level first breached two weeks ago, oil importers are growing increasingly edgy about the impact on their economies.