Oil prices fell Tuesday as OPEC's president said supplies were growing faster than demand and traders breathed easier knowing that petroleum production in the Gulf of Mexico did not suffer as a result of Hurricane Frances (search).

"There's no news to keep prices from falling," said Ed Silliere, vice president of risk management at Energy Merchant in New York, noting that the market has even shrugged off recent pipeline sabotage in Iraq.

Light crude for October delivery dropped 68 cents to settle at $43.31 per barrel on the New York Mercantile Exchange (search).

With only a thin margin of spare output capacity worldwide, energy markets have been jittery all summer due to the possibility of output disruptions in Iraq, Russia and Venezuela.

But with the exception of sporadic export troubles out of Iraq, the global supply chain has remained intact.

Speaking at the World Energy Congress (search) in Sydney on Tuesday, Organization of Petroleum Exporting Countries (search) President Purnomo Yusgiantoro said Tuesday that world oil production is running "1.5 million barrels every day above demand, based on our forecasts." Analysts say daily global oil demand is around 82 million barrels.

Yusgiantoro said oil production in the 11 OPEC nations, including Iraq, is 29 million to 30 million barrels a day. OPEC oil ministers are set to meet in Vienna later this month to discuss ways to bring prices down.

Tom Bentz, a trader at BNP Paribas in New York, said the trend is already pointing in that direction.

Oil prices slid for much of last week despite confusion about the status of Iraqi exports — the kind of information that had contributed to the rapid run-up in oil prices in mid-August.

"The market is starting to show me that it's not prepared to move higher on bullish news," Bentz said, signaling that market sentiment has shifted following oil's rapid rise last month toward $50 a barrel.

In another sign that market psychology may be shifting, the number of Nymex speculators betting on higher oil prices fell by more than 10 percent last week, according to the Commodity Futures Trading Commission (search).

The highest closing price for Nymex-traded crude futures was $48.70, on Aug. 19, and prices have fallen roughly 12 percent since then. On an inflation-adjusted basis, prices are about $14 below the level reached leading up to the first Gulf War.

Prices hovered in the low- to mid-$40 range last week in part because of nervousness that Hurricane Frances might disrupt oil production in the Gulf of Mexico, Bentz said. With that threat gone — and in spite of the increasing strength of Hurricane Ivan in the Caribbean — Bentz said he expects to see the downward trend continue.

Silliere said he expects to see oil prices fall below $40 in the next two weeks, barring any significant supply disruptions.

In London, Brent crude futures rose 14 cents Tuesday to settle at $40.76 on the International Petroleum Exchange.

In other Nymex trading, October heating oil futures fell by 1.33 cent to $1.1636 per gallon, while October gasoline futures dropped by 2.73 cents to $1.1792 per gallon.

Natural gas for October delivery gained 11.5 cents to $4.790 per 1,000 cubic feet.