Oil rises to $72 on positive demand outlook
October 9, 2009
By Rebekah Kebede
New York - Oil rose to more than $72 a barrel on Friday, as a positive demand outlook from the International Energy Agency outweighed a bounce in the dollar.
US crude for November delivery climbed 35 cents to $72.04 a barrel by 11:07 a.m. EDT (1507 GMT).
London Brent crude rose 44 cents to $70.21 a barrel.
"On balance, the IEA's upward revision of its global oil demand growth forecast for 2010 is supportive," said Andy Lebow, a broker at MF Global, New York.
The International Energy Agency increased its global oil demand growth estimate for 2010 as well as for the rest of 2009.
Earlier this week, the US government Energy Information Administration raised its oil demand forecast amid signs the economic climate is improving.
Traders said that a Friday report that crude oil and middle distillate stocks in 16 European countries were lower at the end of September than a month earlier may also have lent some support to the oil prices.
Oil prices also got a boost from US stocks, which rose Friday as investors were encouraged by upbeat broker comments on key tech companies such as Apple.
Despite the higher forecasts for global oil demand, however, inventories of crude oil and products remain high in the United States, the world's top oil consumer.
US gasoline stocks leapt 2.9 million barrels last week, nearly three times the build analysts had expected. Distillate stocks, including diesel and heating oil - rose by 700,000 barrels to fresh 26-year highs, the Energy Information Administration Agency reported Wednesday.
Higher OPEC seaborne oil exports, excluding Angola and Ecuador, also weighed on the market. Such exports will rise 160,000 barrels per day (bpd) in the four weeks to Oct. 24, to 22.65 million bpd, according to Roy Mason, an analyst at British consultancy Oil Movement.
In earlier trading Friday, oil prices were pressured by a stronger US dollar, which was supported by comments from US Federal Reserve Chairman Ben Bernanke indicating that monetary policy might have to be tightened as an economic recovery takes hold.
A weaker greenback tends to support oil because dollar-priced commodities become cheaper for buyers using other currencies.
Adding credence to the dollar, Kuwait's finance minister said on Thursday oil trading would remain in US dollars, the latest denial of a report this week about a move to replace the world's reserve unit with a basket of currencies.
Additional reporting by Robert Gibbons and Gene Ramos in New York, Emma Farge in London and Felicia Loo in Singapore
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