From Saudi Arabia, from Qatar, from Venezuela, the

OPEC

ministers came. They drank

steaming cups of coffee, they lingered over their strudel long into the night, they postured and haggled and, in the end, decided to increase oil production to the tune of 800,000 barrels a day.

But this weekend's Vienna agreement did nothing to stanch the rising cost of oil -- lately it was trading $1.75 higher at $35.38 a barrel. That has set off a new round of worrying on Wall Street, about demand in the economy.

The Here and Now

The persistently high price of oil (it is more than triple its lows of late 1998) is already cutting into third-quarter corporate profits. Analysts have been steadily bringing down their estimates on the most energy-dependent industries. Last month they lowered numbers on transportation companies by 5.5%, according to

I/B/E/S

. The forecast for basic industrials came down 1.8%. For utility companies, 2.2.%

And with the advent of preannouncement season, the period when companies whose numbers won't be up to snuff confess to the Street, we have seen that in some cases the analysts haven't cut the numbers fast enough. Last week, chemical giant

DuPont

(DD) - Get Report

said it would not meet analysts' estimates for the rest of the year because of "substantially higher-than-forecast increases in energy and raw materials costs." DuPont's warning sent analysts rushing to cut estimates on a raft of chemical companies.

It's not entirely the stock analysts' fault that they've been behind the ball on this one: They're dependent on their firms' oil forecast, and oil analysts have been wrongly thinking all year that oil would be heading lower. OPEC itself has been saying for months that it would like oil to be in the $25 range. It isn't there yet.

"I've been thinking that oil prices would stay higher than the consensus, and I keep raising my forecasts," says

Morgan Stanley Dean Witter

TheStreet Recommends

chief U.S. economist Richard Berner.

Not Just Supply

The problem with oil, explains Berner, is not merely a matter of supply. The low oil prices of two years ago, and the lack of demand in a world economy hampered by crisis, led to a shortage of capacity: It simply was not worth it to build tankers, improve refineries or put new money into exploration. As a result, the rise in prices did not, as it should, lead to an increase in supply. Berner worries that there is a risk that his firm's forecast of $30-a-barrel oil this year and $27-a-barrel oil next could fall short. That would put a crimp on profits that Wall Street is not prepared for.

"Rising oil prices are good for 23 companies in the

S&P 500

and bad for the other 477," says Tom McManus, equity portfolio strategist at

Banc of America Securities

. "This is the few selling a crucial product to the many. Whether you use energy to heat your sand into fiber-optic cable, or you use energy to fly millions of people across the country, or if you use energy to heat the stores where you sell frozen vegetables, these costs are rising."

For most companies, however, it is not the increased cost of energy that hurts so much as the way higher energy costs affect demand.

The Good and the Bad

"The message that DuPont delivered is potentially a pretty ugly one," says Doug Cliggott, equity strategist at

J.P. Morgan

. "Costs are up, demand's softer -- we're getting squeezed. In a modest sense, that might be the message of a lot of American households in the next couple of quarters: Costs are up, our income isn't growing like it used to -- we're getting squeezed."

Berner agrees that it is this macro effect on the economy that's important. He estimates that each $5 rise in the per barrel cost of oil takes about 3% off

Gross Domestic Product growth. Economywide, Berner expects after-tax earnings growth to decelerate to 5.2% next year from 14.8% this year.

Whether the energy hit will do any lasting damage to the stock market is an open question. There are reasons that it might not. Slower economic growth brings lower interest rates, and lower interest rates have historically been more important to the stock market than higher profits. SUVs aside, the U.S. is more fuel-efficient these days, and that may limit the overall effect of higher fuel prices on the economy. Finally, technology is one of the least energy-dependent of all sectors, and the U.S. stock market has a very heavy technology weighting these days.

For now, though, such pleasant thoughts may not matter. It is September and investors are thinking about earnings, and they are remembering October and its demons. They see the rising price of oil and they have found something to worry about.