A complete classification and a method of construction of the wavefunctions of the octupole oscillator, according to the physical group chain U(7) contains/implies R(7) contains/implies R(3), are given. The method is based on the concepts of elementary factors (elementary permissible diagrams) for the reduction process in the chain U(7) contains/implies R(3) and of traceless operators for the extraction of irreducible representations of R(7) from those of U(7). The seven quantum numbers used for labelling the wavefunctions are the number of phonons, the seniority, the spin and its projection, the numbers of quartets and sextets of phonons coupled to spin zero, and a label for a 'residual coupling'. A connection between the present problem and the theory of covariants of algebraic forms is mentioned. The construction of the oscillator basis is a first step towards a description of the octupole motions, in their full variety, in nuclei.