Increase comes despite six weeks of rising US crude inventories
Crude oil prices remained largely stable during the week ended 11 March, although US crude inventories rose.
April West Texas Intermediate (WTI) contract was trading at an eight-week high of $81.64 a barrel on 11 March, up $1.34 from the week before.
The European April Brent contract was trading at $80.02 a barrel at the same time, up $1.22 a barrel from the week before.
The last average price available for crude oil sold by the 12 members of international oil cartel Opec stood at $77.80 a barrel on 10 March, up $1.38 a barrel compared to the $76.42 seen a week earlier.
The cartel will meet in Vienna on 17 March for the first of its biannual meetings to to decide production quotas. In its monthly oil market report, it lifted forecasts for world oil demand growth by 0.1 million barrels a day (b/d) on its February assessment, but warned the outlook was clouded by the slow pace of the government stimulus-led economic recovery.
“Given slow global economic recovery, world oil demand growth in 2010 is forecast at 0.9 million b/d or 1.1 per cent, to average 85.2 million b/d,” Opec said its March report. This follows a contraction of 1.4 million b/d in 2009.
The rise in Brent and WTI prices came despite six successive weeks of rising crude oil stocks in the US. A report by the US’ Energy Information Administration (EIA) showed crude oil inventories in the country rose by 1.4 million barrels to 343 million barrels during the week. Stocks of gasoline, however, decreased by 2.9 million barrels to 229 million barrels.
At the same time, US crude imports fell to 8.49 million b/d, down 8.1 per cent from 9.17 million b/d last week.
The EIA expects WTI prices to average above $80 a barrel for the coming months, rising to $82 a barrel by the end of the year and $85 a barrel by the end of 2011.
Analysts say demand from China has supported oil prices as traders expect consumption in developing economies in Asia to make up for declines in Europe and the US. China processed around 8.35 million b/d, according to government statistics, 5.8 per cent more than in January this year.
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