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№ 10 (October 2008)

Oil rises towards $46 on IEA report

Oil rose toward $46 on Thursday after the International Energy Agency predicted global growth in oil demand would resume in 2009 and the Saudi oil minister said OPEC's top exporter pumped less oil than expected last month.

 

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By Alex Lawler, Reuters

Oil rose toward $46 on Thursday after the International Energy Agency predicted global growth in oil demand would resume in 2009 and the Saudi oil minister said OPEC's top exporter pumped less oil than expected last month.

World oil demand growth would return in 2009 after shrinking this year for the first time since 1983, the IEA, which advises 28 industrialized nations on energy policy, said in a monthly report. It also cut forecasts for supply outside OPEC next year.

"We knew the bad bits, demand down, but the supply downgrade was supportive," said Rob Laughlin of MF Global.

U.S. crude was up $2.28 at $45.80 a barrel by 1427 GMT (9:27 a.m. EST), after surging $1.45 to settle at $43.52 on Wednesday. European benchmark Brent crude was up $2.70 at $45.10.

The IEA's view that demand would grow in 2009 contrasts with that of the U.S. government's Energy Information Administration, which forecast this week that consumption would fall by 450,000 barrels per day (bpd) next year.

The Paris-based IEA also lowered forecasts for supply from outside OPEC in 2009, leading to a 200,000 bpd increase in the amount it said OPEC needs to pump to balance the market.

SAUDI OUTPUT

Oil also rose as Saudi Oil Minister Ali al-Naimi said the world's largest exporter pumped 8.49 million bpd of oil in November, less than estimated by analysts and in line with its OPEC target.

"We will give you the November number because that's what everybody is looking for," Naimi said during a visit to Poznan, Poland. "It's 8,493,300 barrels per day."

That would put the kingdom's output in line with its implied OPEC target of 8.47 million bpd and is 560,000 bpd less than the IEA's estimate of Saudi November production, published earlier on Thursday, of 9.05 million bpd.

Industry sources told Reuters on Wednesday they expected January shipments to be below Saudi's existing OPEC target, implying it expects OPEC to agree a further supply cut when the producer group meets in Algeria on December 17.

Russia, which will attend the Algeria meeting as an observer amid calls from some members for Moscow to join in output curbs, said on Wednesday it will present its own proposal at the talks.

Oil has fallen by more than $100 a barrel from a record high of $147.27 reached in the summer.

- Copyright 2008, Reuters. All rights reserved

 


 

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