Oil prices close in on 90 dollars

11th November 2010, Comments 0 comments

World oil prices neared 90 dollars for the first time in more than two years on Thursday, stoked by expectations of increased demand amid tight supplies, traders said.

Brent crude reached 89.70 dollars a barrel in London trade -- its highest level in two years and close to reaching the 90-dollar mark for the first time since October 2008.

Brent North Sea crude for delivery in December later stood at 89.47 dollars, up 51 cents compared with Wednesday's close.

New York's main contract, light sweet crude for December, was up 68 cents to 88.49 dollars a barrel.

The Organization of Petroleum Exporting Countries (OPEC) on Thursday revised upward its world oil demand growth estimates for this year and next amid cautious optimism about the global economic outlook.

OPEC said it was pencilling in world oil demand growth of 1.32 million barrels per day (bpd) or 1.6 percent to 85.78 million bpd for the whole of 2010, compared with 1.3 percent previously.

And in 2011, oil demand was forecast to increase by a further 1.17 million bpd or 1.4 percent to 86.95 million bpd, instead of the previous estimate of 1.2 percent, the cartel said in its latest monthly bulletin.

"Despite initial economic assessments that underestimated the second half of the year's economic activities, oil demand is picking up in the third and fourth quarters," OPEC wrote.

The report came one day after official data showed crude stockpiles in the United States, the world's biggest oil consumer, eased 3.3 million barrels in the week ending November 5, compared with forecasts of a rise.

© 2010 AFP

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