World oil prices firm before OPEC output call

14th October 2010, Comments 0 comments

Oil prices rose slightly in cautious trading on Thursday, ahead of an OPEC output decision, with traders tracking the struggling dollar and assessing the global energy demand outlook.

New York's main contract, light sweet crude for delivery in November, gained 59 cents to 83.60 dollars a barrel.

Brent North Sea crude for November added 31 cents to 84.95 dollars in morning London deals.

"It's all the dollar this morning -- the euro finally pushed through 1.41 dollars," said VTB Capital analyst Andrey Kryuchenkov.

The euro rose to 1.41 dollars on Thursday for the first time for nine months amid growing expectations that the US Federal Reserve will adopt further easing measures to boost the economy.

And the dollar hit a fresh 15-year low point against the yen on Thursday amid expectations of further US credit easing and rises by Asian currencies after Singapore tightened monetary policy, dealers said.

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.

The IEA, representing leading oil consumer nations, revised up its demand forecast for oil, by more than OPEC had done on Tuesday, mainly because of an economic upturn in industrialised countries.

The body 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.

Later on Thursday, in Vienna, the 12-nation Organization of Petroleum Exporting Countries (OPEC) is widely expected to hold its official output quota at 24.84 million barrels a day, but its members could agree to improve compliance.

"No change is expected and they will be talking compliance more than anything," Kryuchenkov said.

© 2010 AFP

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