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Oil prices rise on weak dollar |
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US crude stockpiles falling
NEW YORK – Oil prices edged up Thursday amid a weakening dollar and falling crude inventories in the United States, the world's largest oil-consuming nation.
Market sentiment was also boosted by International Energy Agency forecasts of higher global oil demand and OPEC's decision to maintain output quotas.
New York's main contract, light sweet crude for October delivery, ended 63 cents higher from Wednesday's closing price at $71.94 per barrel.
London's Brent North Sea crude for October delivery added three cents to $69.86.
A weekly government report showing easing crude inventories and higher gasoline and other stockpiles in the United States lifted market sentiment, analysts said.
Crude inventories fell by 5.9 million barrels last week, nearly four times more than expected, data from the US Energy Information Administration said.
But gasoline stockpiles unexpectedly rose 2.1 million barrels -- analysts had forecast a drop of 1.3 million barrels -- and distillate stocks, including diesel and heating oil, rose two million barrels, more than the expected 600,000 barrels.
"That’s very bullish because the biggest weakness in the global oil market has been the US market," independent trader Ellis Eckland said.
He added that the weakening dollar as well as the rising stock market added to market optimism.
"If the dollar continues to weaken, for sure oil will go above $75 (per barrel)," Eckland said.
The dollar fell to a new 2009 low against the euro Thursday as investors moved away from the safe-haven greenback to riskier currencies.
The International Energy Agency raised its forecasts for global oil demand in 2009 and 2010 largely because of stronger-than-expected economic data from China and the United States.
The forecasts went up nearly 0.5 million barrels per day for both 2009 and 2010 to 84.4 mbpd and 85.7 mbpd, respectively, the Paris-based IEA said in its monthly oil market report.
But it warned that the economic recovery would be slow.
Also on Thursday, the Organization of the Petroleum Exporting Countries (OPEC) said its production levels would be maintained at current levels after the conclusion of a ministerial meeting in Vienna.
"Since the market remains oversupplied and given the downside risks associated with the extremely fragile recovery, the conference once again agreed to leave current production levels unchanged for the time being," OPEC said in a statement.
OPEC, whose 12 members pump 40 percent of the world's oil, agreed in late 2008 to remove a massive 4.2 million barrels of daily output from the market.
The cartel's official daily output quota has stood at 24.84 million barrels per day since January.
The global economic downturn has sapped demand for energy, dragging crude prices from record highs of above $147 in July 2008 to $32.40 in December. They have since recovered to hover around $70.
This price level "is good for everybody, consumer (and) producer," Saudi Oil Minister Ali al-Naimi, whose country is the biggest OPEC oil producer and its most influential member, said ahead of the meeting.
Source: inquirer.net
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