But domestic demand is bottoming out and will rebound, increasing pressure to raise production.

"It gives me a little more confidence" that exports will help drive the recovery and that demand for imports has rebounded following the Persian Gulf war.

Besides wanting to keep prices high, the so-called price hawks contend that the American economy is not so frail and that demand could rebound.

And while demand for taxis has rebounded this year, many drivers have not recovered from the financial effects of the dip after the Sept. 11 terrorist attack.

He added that it was unclear whether demand would drop and remain low or drop and then rebound.

They said the report showed demand was rebounding after a brief period when businesses cut back to trim a high backlog of unsold goods.

After slumping for three years in the late 1990's, demand rebounded in the second half of 1999.

Facing blackouts and rationing, Brazilians slashed consumption by 20 percent or more, and demand has not rebounded.

It may be bleak now, "but the demand for science will rebound when capital markets bounce back," Mr. Maguire said.

As a result, in the past three years oil production has begun to decline dramatically in the United States while demand for OPEC oil has rebounded.