Oil traded near the highest price in three weeks as signs of economic recovery in the U.S. stoked speculation that fuel demand will increase in the world’s biggest crude consumer.
Venezuelan Energy Minister Rafael Ramirez said $100 is a barrel a “fair price” for oil and that OPEC is unlikely to change its output quotas at its meeting later this month. A U.S. government report tomorrow may show the U.S. added 145,000 jobs last month, according to a Bloomberg News survey of economists. Prices gained earlier today as cold weather boosted heating demand and disrupted transport in Europe.
“We seem to be close to the top of the trading range, so we’ll need something new to push oil through $90 and cold weather may not be enough,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London.
The January contract on the New York Mercantile Exchange was at $86.88 a barrel, up 13 cents, in electronic trading at 1:45 p.m. London time. Yesterday, it rose $2.64 to close at $86.75, the highest settlement since Nov. 11. Brent crude for January settlement was up 38 cents at $89.25 a barrel on the London-based ICE Futures Europe exchange.
Global economic growth will drive New York crude futures to an average $110 a barrel in 2012, up from a forecast of $100 a barrel for next year, Goldman Sachs Group Inc. said in a report yesterday. Oil gained 3.3 percent last month and has advanced 9.5 percent this year.
The Organization of Petroleum Exporting Countries, responsible for 40 percent of global supplies, is unlikely to change its output quotas when it meets in Quito, Ecuador, on Dec. 11, Venezuela’s Ramirez told reporters today in Doha, where he was attending a meeting of the Gas Exporting Countries Forum. He said $100 represents a “fair” price for a barrel of oil.
Payrolls in the U.S. rose while the country’s manufacturing expanded for a 16th straight month, according to government data released yesterday. An Energy Department report showed U.S. fuel consumption declined for a third week and oil supplies unexpectedly rose a second week.
U.S. fuel demand, in terms of products supplied to refiners, dropped 1.8 percent to 18.5 million barrels a day in the week ended Nov. 26, the lowest in six weeks, the Energy Department said. Crude stockpiles increased by 1.07 million barrels. They were forecast to decrease by 1.15 million barrels, according to the median of 16 analyst estimates in a Bloomberg News survey.
Gasoline inventories climbed last week while distillate fuel supplies, including diesel and heating oil, slipped. Crude stockpiles at Cushing, Oklahoma, the delivery point for New York oil futures, jumped 2.7 percent to 34.5 million barrels.
The Cushing gains have increased the discount between January New York futures and London’s Brent contract to $2.37 a barrel today compared with $1.05 a month ago.