Oil rises on increased forecasts for demand growth

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Oil prices rose on Tuesday after the U.S. Energy Information Administration (EIA) said world oil demand would grow faster than expected in 2013 and OPEC raised its outlook for the amount of crude it will need to pump this year.

The EIA increased its forecast for demand growth after the 12-member Organization of the Petroleum Exporting Countries said in its own monthly market report that world oil consumption would expand more quickly than previously thought.

"Overall, I would say the OPEC report is constructive and mildly bullish based on the demand forecast," said Dominick Chirichella, senior partner at Energy Management Institute in New York.

Brent crude rose 53 cents to settle at $118.66 a barrel, after finishing lower on Monday.

U.S. crude gained 48 cents to $97.51 a barrel.

The RBOB gasoline contract rebounded after losses on Monday following a less-damaging-than-expected blizzard in the U.S. Northeast over the weekend.

The EIA upped its forecast by 110,000 barrels per day to 1.05 million bpd in 2013, taking global demand to 90.2 million bpd this year.

Supply worries stemming from conflict in the Middle East persisted on Tuesday, as investors eyed Iran's nuclear program more than North Korea's third nuclear test.

Tensions eased on Tuesday when Iran acknowledged it was converting some of its higher-grade enriched uranium into reactor fuel, a move that could help prevent a dispute with the West over its nuclear program hitting a crisis in mid-2013.

Israeli Prime Minister Benjamin Netanyahu said on Monday the new centrifuges Iran was installing for uranium enrichment could cut by a third the time needed to create a nuclear bomb. Tehran says its nuclear programme is for peaceful energy purposes.

U.S. SUPPLY

Oil markets also focused on weekly inventory data in the United States, the world's top oil consumer. U.S. commercial crude oil stockpiles are expected to have risen by 2.4 million barrels last week, a Reuters poll showed.

Distillate stocks, which include heating oil and diesel fuel, were projected to be down 1.6 million barrels, while gasoline inventories were seen up 300,000 barrels.

The American Petroleum Institute, an industry group, is due to release its weekly report at 4:30 p.m. EST (2130 GMT). The EIA follows with its own figures on Wednesday. (Additional reporting by Peg Mackey in London and Osamu Tsukimori in Tokyo; Editing by Dale Hudson, Alison Birrane and Nick Zieminski)



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


5M Series

Five M Series Models: 5065M, 5075M, 5085M, 5100M, and 5115M (65-115 hp). If you spend a lot of time on ... Read More

View all Products in this segment

View All Buyers Guides

)
Feedback Form
Leads to Insight