Oil up $3 on forecasts for U.S. inventory drop, OPEC [input]
Wed Nov 14, 2007 8:26 PM GMT
By Matthew Robinson
NEW YORK (Reuters) - Oil jumped more than 3 percent on Wednesday on
expectations of falling U.S. inventories as OPEC brushed off calls to raise
supplies.
U.S. crude settled up $2.92 at $94.09 a barrel after moving as high as $94.37.
London Brent crude rose $2.53 to $91.36 a barrel.
U.S. government data to be released on Thursday is expected to show crude
stocks in the world's top consumer fell 800,000 barrels last week as colder
weather hit the giant U.S. Northeast heating oil market, an analyst poll
showed.
Additional support came from the weakening dollar, which fell again against
the euro as continued worries that a struggling U.S. housing sector and
lingering credit problems weighed on sentiment.
"The weaker dollar is helping and the market is also looking forward to
tomorrow's data," said Jim Ritterbusch, president of Ritterbusch & Associates.
U.S. Energy Secretary Samuel Bodman has asked oil cartel OPEC to boost
production because of shrinking oil inventory levels in developed economies.
Falling stocks helped push oil prices to a record $98.62 a barrel last week,
but members of the producer group have blamed record prices on speculation and
not supply shortages.
"At this time, frankly, we don't see that we should add more oil," said
Secretary-General Abdullah al-Badri ahead of the OPEC heads of state summit in
Riyadh.
Saudi Arabia's oil minister Ali al-Naimi has confirmed that OPEC will not
discuss raising crude output at a heads-of-state meeting on November 17-18.
OPEC's next official policy meeting is not until December 5 in Abu Dhabi.
The head of the International Energy Agency agreed speculation has helped
drive up prices, but said tight fundamentals were the underlying cause.
"We think that speculation has played some impact on the price levels," Nobuo
Tanaka told Reuters.
"Our judgment is that speculation doesn't decide the direction of the market,"
Tanaka said. "The direction ... (is) decided by the fundamentals of the market.
The supply-demand situation. The current situation is that the market is
getting tight."
Concerns about demand helped knock oil off last week's highs, with the
International Energy Agency's latest monthly report cutting growth predictions.
(Additional reporting by Jane Merriman in London, Fayen Wong in Sydney and
Annika Breidthardt in Singapore; editing by Christian Wiessner)
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