Oil rises near $82, IEA sees slower Q4 demand

LONDON - Oil rose near $82 a barrel on Thursday, marking a month at record high prices that the International Energy Agency (IEA) says are acting as a brake on fuel demand.

By (Reuters)

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Published: Thu 11 Oct 2007, 6:22 PM

Last updated: Sat 4 Apr 2015, 11:25 PM

US crude climbed 65 cents to $81.95 a barrel by 1022 GMT. London Brent crude climbed 71 cents to $79.31.

Costly oil is starting to tempt consumers to switch oil for cheaper natural gas and estimates for economic growth have been trimmed, the IEA, adviser to industrialised countries, said in its monthly report.

The IEA said demand will rise by 2.03 million barrels per day in the fourth quarter from a year ago, 320,000 bpd less than previously expected.

Oil is hovering near record highs, as lower stocks of heating oil have heightened concerns about a potential supply crunch this winter.

“There is a broad consensus that supplies will get tighter this winter,” the IEA said.

US weekly oil inventory data, due out later on Thursday, are expected to show a 400,000-barrel decline in distillate stocks, which include heating fuel. European oil inventories fell in September, data showed this week.

Crude inventories are expected to have risen by 900,000 barrels, while gasoline stocks edged up by 100,000 barrels.

“WTI is now back towards the high of the recent range and today will be a data showdown day with the IEA report followed by the EIA report, which should make for some high intraday volatility,” said Olivier Jakob of Petromatrix.

Oil prices have been holding near $80 since striking a record of $83.90 in September, as investors shrug off OPEC’s pledge to add 500,000 barrels per day (bpd) more oil to the market next month.

Top exporter Saudi Arabia made good on that pledge on Thursday, telling top Asian customers that it would increase shipments by about a tenth.

Renewed US dollar weakness has added to oil’s latest gains. It steadied on Thursday but remains near an all-time low against the euro, a factor that has spurred buying in dollar-denominated commodities markets as a hedge.

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