Oil steadies amid OPEC decision, falling US crude stocks
World oil prices held steady on Thursday as traders digested OPEC's decision to maintain its output target, alongside news of a surprise drop in crude reserves in the United States, the world's top energy consumer.
New York's main contract, light sweet crude for delivery in November, gained 45 cents to 83.46 dollars a barrel after earlier hitting 84.12 as the US currency plunged in value against the euro and the yen.
Brent North Sea crude for November dipped 18 cents to 84.46 dollars in late afternoon London deals. The contract, which earlier topped 85 dollars, expires at the close.
The Organization of Petroleum Exporting Countries (OPEC) left its official oil production target unchanged on Thursday, in line with expectations in the face of an uncertain economic outlook, after a high-profile meeting in Vienna.
"The OPEC meeting came as widely expected without any surprises for the oil market, so crude oil prices remained fairly unchanged," said Sucden analyst Myrto Sokou.
OPEC, which pumps 40 percent of the world's oil, agreed to keep its target at 24.84 million barrels a day, current president Wilson Pastor-Morris of Ecuador told reporters after the meeting at its headquarters.
"No change" to output, said Pastor-Morris, while Saudi Arabia Oil Minister Ali al-Nuaimi also confirmed the widely-expected decision, adding that it had been taken "because the market is good."
OPEC also elected Iran to become the cartel's president in 2011, a post it will hold for the first time in 36 years.
Elsewhere on Thursday, the US government's Department of Energy (DoE) revealed that American crude stockpiles fell unexpectedly in the week ending October 8.
Crude reserves dropped by 400,000 barrels last week, confounding market expectations for a gain of 1.2 million barrels.
The DoE added that gasoline or petrol reserves sank 1.8 million barrels, which was heavier than expectations for a 1.4-million-barrel drop.
And distillates, which include diesel and heating fuel, slid 300,000 barrels. That was far lighter than predictions for a decline of 1.5 million.
"The figures were quite mixed with a large drawdown in gasoline stocks but small declines in crude and distillate inventories. So, the general fundamental picture looks still weak," added Sokou.
The inventories report was published one day later than normal due to a US public holiday on Monday.
"The modest drop in crude stockpiles is due to the very low imports number which again is caused by the problems in the Houston Ship Channel last week," added DnB NOR energy analyst Torbjorn Kjus.
"Next week crude stocks will probably post a sizeable build as imports come up and refinery runs stay low due to maintenance.
"The OPEC meeting is a non-event this time," he also noted.
In earlier deals on Thursday, the oil market had bounced higher as traders had tracked the struggling dollar and assessed the global energy demand outlook.
The euro struck 1.41 dollars on Thursday, nearing a nine-month peak on growing expectations the US Federal Reserve will adopt further easing measures to boost the economy.
A weaker US unit boosts demand for dollar-priced oil, which becomes cheaper for buyers using stronger currencies.
The market was also buoyed this week by news of record Chinese crude imports in September, which showed strengthening demand from the Asian powerhouse.
And prices found further support after the Paris-based International Energy Agency upgraded its energy demand forecasts, mainly because of an economic upturn in industrialised countries.
The IEA raised its forecast for global demand this year by 300,000 barrels per day to 86.9 million barrels per day and by the same amount to 88.2 million barrels per day in 2011.
© 2010 AFP