Crude rises $1/bbl as OPEC leaves output unchanged

13 December 2010 11:36  [Source: ICIS news]

SINGAPORE (ICIS)--Crude futures climbed more than $1/bbl on Monday, supported by OPEC’s decision to leave output levels unchanged at its weekend meeting, despite strong demand amid cold winter weather in the northern hemisphere.

At 11:15 GMT, January Brent on London’s ICE futures was trading at $91.85/bbl, up $1.37/bbl from the previous close, after higher hitting a session high of $91.90/bbl, up $1.42/bbl.

January NYMEX light-sweet crude futures were trading at $88.93/bbl up $1.14/bbl from the previous close. Earlier, the US crude hit a session high of $88.99/bbl, up $1.20/bbl.

OPEC members agreed at their weekend meeting in Quito, Ecuador, to leave output levels unchanged.

The producers’ organisation has maintained its supply target since announcing a series of cuts in late 2008, which has reduced supply by a total of 4.2m bbl since January 2009.

Crude oil prices hit their highest level since October 2008 earlier in December, supported by the weak US dollar and cold winter weather in Europe and the US northeast, which has boosted demand.

On 10 December, the International Energy Agency (IEA) revised upwards its forecast for global oil demand in 2011 and 2010 to 88.8m bbl/day and 87.4m bbl/day, respectively.

The agency also said global oil demand growth in 2011 is expected to be substantially lower than in 2010.

Concerns over possible interest rate hikes in China remained a worry. Last week’s move by China to increase bank reserve requirements, in an effort to control rising inflation, had served to limit the upside pressure.

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By: James Dennis
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