Oil rises above $45 on IEA report, Saudi output
Friday, 12 December 2008
LONDON, Dec 11 (Reuters): Oil rose above $45 Thursday after the International Energy Agency (IEA) predicted global growth in oil demand would resume in 2009 and Saudi oil minister said Organisation of Petroleum Exporting Countries' (OPEC) 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 industrialised 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.
US crude was up $2.23 at $45.75 a barrel by 6:52am EST, after surging $1.45 to settle at $43.52 Wednesday. Brent crude was up $2.55 at $44.95.
The IEA's view that demand would grow in 2009 contrasts with that of the US government's Energy Information Administration, which forecast this week that world consumption would decline by 450,000 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.
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.
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 Thursday, of 9.05 million bpd.
Industry sources told the news agency 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.
Indicators on the health of the US economy, such as weekly jobless claims due later in the day, could make grim reading for Wall Street and imply a further weakening in demand from the world's top oil consumer.
Oil has fallen by more than $100 a barrel from a record high of $147.27 reached in the summer, pressured by weakening global demand.
World oil demand growth would return in 2009 after shrinking this year for the first time since 1983, the IEA, which advises 28 industrialised 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.
US crude was up $2.23 at $45.75 a barrel by 6:52am EST, after surging $1.45 to settle at $43.52 Wednesday. Brent crude was up $2.55 at $44.95.
The IEA's view that demand would grow in 2009 contrasts with that of the US government's Energy Information Administration, which forecast this week that world consumption would decline by 450,000 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.
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.
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 Thursday, of 9.05 million bpd.
Industry sources told the news agency 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.
Indicators on the health of the US economy, such as weekly jobless claims due later in the day, could make grim reading for Wall Street and imply a further weakening in demand from the world's top oil consumer.
Oil has fallen by more than $100 a barrel from a record high of $147.27 reached in the summer, pressured by weakening global demand.