VIENNA, Austria - Oil futures jumped above $48 per barrel on Friday as OPEC forecast increased demand for its crude in the first half of the year.
Analysts said prices also were being supported by anxieties over elections in Iraq on Jan. 30 and the meeting on the same day of the Organization of Petroleum Exporting Countries.
Light, sweet crude for March delivery rose $1.37 cents to $48.68 a barrel in early afternoon trade on the New York Mercantile Exchange. Heating oil for February delivery rose 382 cents to $1.378 per gallon.
Brent crude was up $1.21 cents at $45.53 a barrel on London's International Petroleum Exchange.
OPEC, citing supply problems from non-OPEC countries and continued strength from China's economy, forecast demand from member countries for the first quarter at 28.56 million barrels a day - up by 390,000 barrels - and 27.68 million barrels a day for the second quarter, an increase of 540,000 barrels.
Prices had been pushed lower in previous days by expected milder temperatures in North America, the key market for heating oil, and increases in supplies for the U.S. market.
The U.S. Department of Energy reported Wednesday that the nation's inventory of crude oil rose by 3.4 million barrels last week to 292.2 million barrels, about 8 percent above year-ago levels. The U.S. supply of distillate fuel, which includes heating oil, diesel and jet fuel, rose by 800,000 barrels to 123.8 million barrels, or 5 percent below year-ago levels.
Crude futures are well below the October peak above $55 a barrel, but prices are still close to 30 percent higher than a year ago due to strong global demand, temporary output snags and fears that geopolitical strife could further threaten supplies.
Oil prices briefly pushed to their highest point in seven weeks Tuesday, hitting $49.50 per barrel in intraday trading on the Nymex, after the International Energy Agency raised its estimate for expected daily demand for crude in 2005 by 100,000 barrels a day to 1.4 million barrels.
Traders said there would be an increasing focus on likely developments at the OPEC meeting. The group agreed in December to trim production by 1 million barrels a day starting this month to bring output closer to its self-imposed target of 27 million barrels a day.
Firm prices reduce the likelihood of cuts, but analysts said even the slight possibility of such a move could affect markets.
"There is probably some feeling that the OPEC meeting is a week away from this Sunday and the potential for them to cut production is there," said oil price strategist Adam Sieminski of Deutsche Bank in London.
Prices are also being held firm "by the uncertainties in Iraq with the election coming up," he said.
Attacks - including those on oil pipelines and storage facilities - have surged in the run-up to the elections, which insurgents have vowed to disrupt.
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