Oil prices rally above 91 dollars

13th December 2010, Comments 0 comments

Crude oil prices jumped above 91 dollars here on Monday as the market digested OPEC's move over the weekend to maintain the cartel's output levels.

Brent North Sea crude for delivery in January advanced by 91 cents to 91.39 dollars a barrel in London morning trade.

New York's main contract, light sweet crude for January, gained 68 cents to 88.47 dollars.

The Organization of Petroleum Exporting Countries (OPEC) on Saturday decided to leave production quotas unchanged at a meeting in Ecuador's capital Quito, stressing looming "risks to the fragile global economic recovery."

The 12-nation group said in a statement that the economic growth that had pushed oil to two-year highs above 92 dollars a barrel last week was likely to slow next year.

That, and the challenges to the world's recovery from the 2008 financial crisis, "would negatively impact on oil demand," it said.

"An interesting aspect of the OPEC meeting were various statements on prices, showing that hawkish OPEC members such as Iran, Libya, Venezuela and Angola have no problem with (oil at) 100 dollars," noted analysts at JBC Energy Research.

"Some OPEC members may ask for higher prices, ignoring how fragile the global economy still is," they added.

Analysts meanwhile said that a narrower US trade deficit and a blizzard sweeping across the American midwest would continue to support prices.

"The cold weather in the northern hemisphere would be supporting the oil prices, as well as positive US trade data released over the weekend," said Serene Lim, oil and gas analyst for ANZ bank in Singapore.

A fierce early winter storm pounded several midwestern US states Sunday, shutting busy airports and highways as the storm barrelled eastward.

The cold snap in the world's biggest oil consumer will mean extra demand for heating, helping to support energy prices.

Figures out on Friday meanwhile showed the US trade deficit narrowed sharply in October, suggesting stronger growth in the recovering economy.

The Commerce Department said the trade deficit stood at a seasonally adjusted 38.7 billion dollars, the smallest gap all year and down 13 percent from a revised 44.6 billion dollars in September.

Crude futures are also winning support from strong Chinese demand.


© 2010 AFP

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