MW: Oil gains after forecast signals rising global demand
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures snapped a two-session losing streak to rise on Wednesday, on the heels of increased forecasts for world oil demand and a weaker dollar.
News that China imported a record 5.67 million barrels of oil a day in September also boosted prices.
Crude for November delivery added $1.13, or 1.4%, to $82.78 on the New York Mercantile Exchange. It earlier hit an intraday high of $83.15 a barrel.
The International Energy Agency and the U.S. Energy Department’s Energy Information Administration on Wednesday raised their expectations for world oil demand.
The Paris-based agency revised higher its 2010 and 2011 estimates for global oil demand by 300,000 barrels a day on average. Global oil demand is now expected to average 86.9 million barrels a day in 2010, up 2.5% year-on-year, and 88.2 million barrels a day in 2011, an increase of 1.4%.
The Energy Information Administration raised its outlook for world oil demand this year by 1.7 million barrels per day to 86.06 million barrels, citing strong oil demand from China and developed countries in the first half.
For 2011, the statistics arm of the Department of Energy said it expects global oil demand to rise by 1.4 million barrels a day to 87.44 million barrels next year, unchanged from its prior forecast.
The EIA said it expects OPEC production to rise by 300,000 barrels per day this year and 600,000 barrels per day in 2011, keeping prices in check. The agency raised its supply project from non-OPEC countries to 900,000, up 200,000, largely due to near-record crude oil output in Russia.
Meanwhile, the dollar index, which compares the U.S. unit to a basket of six other currencies, lost 0.2% to 77.21.
Investors largely interpreted Tuesday’s minutes from the latest Federal Reserve meeting to mean authorities are bound to resume buying bonds next month. The dollar had already been suffering for the past couple of weeks as expectations of quantitative easing floated about.
In Vienna, OPEC oil ministers are expected to leave production targets unchanged Thursday in an effort to project an air of stability as the global economic recovery continues.
The price of crude in recent months has meandered between $75 and $85 a barrel, although it headed higher as the U.S. dollar softened.
Energy products tracked oil higher, with November gasoline (RBX10 2.12, -0.03, -1.42%) advancing 3 cents, or 1.3%, to $2.15 a gallon.
Natural gas for November delivery (NGX10 3.74, +0.11, +3.06%) added 11 cents, or 1.2%, to $3.74 per million British thermal units. A close along these levels would be natural gas’ best in a week.
