Oil prices rise on eve of OPEC meeting

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World oil prices advanced Wednesday on the back of a weak dollar and strong Chinese crude imports as the market waited for a crucial OPEC output meeting in Vienna, traders said.

New York's main contract, light sweet crude for delivery in November, gained 1.23 dollars to 82.90 dollars a barrel.

London's Brent North Sea crude for November delivery added 99 cents to 84.49 dollars.

"The price of oil has climbed above 82 dollars a barrel again, thanks to a weaker US dollar and more robust import figures from China, but is still well below the level reached last week," said Commerzbank analyst Carsten Fritsch.

"China imported a record volume of crude oil of 5.67 million barrels a day in September, a year-on-year rise of 35 percent."

In foreign exchange deals on Wednesday, the European single currency topped 1.40 dollars again as the US unit came under pressure from the prospect of further US monetary policy easing.

Minutes from last month's US Federal Reserve policy meeting showed Tuesday that the central bank anticipates additional stimulus may be needed soon to prop up a slackening economic recovery.

A weaker dollar boosts demand for dollar-priced oil, which becomes cheaper for buyers using stronger currencies.

Meanwhile on Wednesday, the Paris-based International Energy Agency hiked 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 mbpd in 2011.

The latest forecasts, contained in the IEA's monthly report, represented annual increases of 2.5 percent and 1.4 percent respectively.

SEB Commodity Research strategist Filip Petersson expressed surprise at the upward revisions.

"We were quite surprised to see the substantial revision higher since our expectations were that 2010 estimates would remain largely unchanged and 2011 estimates would be revised slightly lower due to the high level of recovery uncertainty at the moment," Petersson told AFP.

"However, the IEA is obviously seeing an unexpected demand recovery in the OECD that pushes their estimates a notch higher.

"Meanwhile, Chinese trade data shows that import demand is stronger than ever.

"Emerging markets thus continue to drive demand growth while developed markets offer a solid demand base. From that perspective, the revision higher appears fact-based and well motivated."

© 2010 AFP

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