Oil prices rise as IEA lifts demand forecast

10th September 2010, Comments 0 comments

Oil prices rose on Friday as the International Energy Agency raised slightly its forecast for global oil demand this year and following the closure of a pipeline carrying crude to the United States.

New York's main contract, light sweet crude for delivery in October jumped 1.61 dollars to 75.86 dollars a barrel.

Brent North Sea crude for October delivery climbed 16 cents to 77.63 dollars.

The IEA on Friday raised its overall forecast for 2010 by 50,000 barrels a day -- reflecting mainly higher-than-expected demand in North America and advanced countries in Asia.

Those increases more than offset a lowering of forecast overall demand from non-OECD countries and notably the Middle East and Asia, by 30,000 barrels a day. Demand in China will continue to grow strongly, but at a sharply slower pace, the IEA said.

Prices also rose after "the closure of a major pipeline taking Canadian crude into the US Mid-West" following a reported leak, said David Hufton, an analyst at PVM Oil Associates.

The market also digested a stream of contrasting US data, analysts said.

The US Department of Energy (DoE) in a report on Thursday said crude stocks last week dropped by a modest 1.9 million barrels from the previous week.

But the private American Petroleum Institute (API) estimated on Wednesday that stocks had plunged 7.3 million barrels over the same period.

On the US economic front, data out on Thursday showed new claims for jobless benefits for the week to September 4 fell to 451,000, down 27,000 from the previous week's revised figure.

The latest figure was better than most economists' expectations of 470,000 new claims, sparking optimism that recent negative trends were just a blip on the road to recovery.

The US economy is the world's biggest energy consumer and its economic data is widely followed to gauge American consumer spending including energy.


© 2010 AFP

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