The markets have two additional oil industry data points to digest Friday, and through the weekend:

First the good news: OPEC (Organization of Petroleum Exporting Countries) has increased oil production in response to sustained +$90 per barrel prices.

OPEC's 10 members bound by output targets, all except Iraq and Angola, pumped 26.98 million barrels per day, up 180,000 barrels per day from September 2007, according to the survey of oil firms, traders, OPEC officials and analysts, Reuters reported Friday.

Now the bad news: OPEC will need to pump more than the additional 500,000 barrels a day agreed in September 2007 to avoid tight crude and product inventory levels, the director of the U.S. Department of Energy's data section said.

"If no additional supply by OPEC is agreed we will see a shortage in the first quarter of 2008 in inventories. We will see higher draws from inventories," Guy Caruso, administrator of the the U.S. Department of Energy's Energy Information Administration, told an energy conference in Dubai, Dow Jones reported. "U.S. stock inventories for the winter are going to be very tight," Caruso said.

Oil gained $1.29 to $94.78 in Friday afternoon trading.

Oil Analysis: OPEC's additional output is a welcome sight, but a larger production increase is needed. Further, oil's obvious long-term price uptrend remains intact, but wait for secondary and tertiary confirmation from other, veteran oil industry analysts (such as Daniel Yergin) before forming a conclusion regarding prospective Q1 2008 supply conditions. Oil users, particularly in the North American market, fear "the dreaded S-word" - - shortage - - but until other sources besides the U.S. DOE can confirm it, the operative phrase remains: oil prices are elevated, U.S. supplies are tight, but contracts are being filled. Short-term, oil remains overbought and vulnerable to a $5-$15 pull-back.