Oil Trades Near a 27-Month High as IEA Raises Demand Forecast
Worldwide oil consumption will rise by 1.4 million barrels a day, or 1.6 percent, to 89.1 million a day, the Paris-based adviser said today in its monthly Oil Market Report. Futures earlier fell 0.9 percent, the most in two weeks, after Alyeska Pipeline Service Co. said it was increasing flows at the network that carries 11 percent of U.S. crude output following repairs.
“Demand growth is slowing but still positive,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “Perhaps getting above $90 so soon the market has got carried away a little, but colder-than-normal weather conditions have been supportive.”
Crude for February delivery dropped as much as 83 cents to $90.71 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $91.50 at 9:34 a.m. London time. Brent crude for March settlement was at $97.89 a barrel, up 46 cents, on the London-based ICE Futures Europe exchange.
Nymex floor trading was closed yesterday for a U.S. holiday and electronic trades will be booked with today’s floor transactions for settlement purposes.
Prices in New York rose 4 percent last week, the most in six weeks, after the line’s closure Jan. 8 forced BP Plc, ConocoPhillips and Exxon Mobil Corp. to cut output. Futures reached a 27-month high of $92.58 on Jan. 3.
Oil was being pumped through the Alaska pipeline at more than 500,000 barrels a day at 4 p.m. local time yesterday, Alyeska said in a statement. That’s almost 80 percent of the average rate in December. Stockpiles in Alaska, the biggest U.S. state, have dropped 50 percent since the disruption, reaching 1.47 million barrels on Jan. 13, according to the most recent data from the Alaska Department of Revenue.
“There were people looking at the short-term” oil disruption, said Tetsu Emori, a commodity fund manager at Astmax Ltd. in Tokyo. “There’s an adequate amount of oil in the market at the moment.”
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