LONDON, Oct 3 Oil held near $ 80 a barrel on Wednesday after an unexpected rise in crude

Written by:
Subscribe to Oneindia News

LONDON, Oct 3 (Reuters) Oil held near $80 a barrel on Wednesday after an unexpected rise in crude oil stocks last week in top consumer the United States.

U.S. crude was 1 cent lower at $80.04 a barrel by 1452 GMT.

Prices had fallen close to $3 from a near record high late last week on concerns the global credit crunch would stymie U.S. and European economic growth.

Brent crude was down 10 cents at $77.28.

U.S. crude oil stocks rose 1.2 million barrels last week, when analysts had forecast a drop of 800,000 barrels.

Distillates, which include heating oil, fell 1.2 million barrels versus forecasts for a 1 million barrel increase.

''This is bearish for crude oil and bullish for distillates,'' said Tim Evans, energy analyst at Citigroup Futures Research, ''Personally, I'm surprised to see a build in crude stocks and domestic production of crude oil rising last week when we know there were shut-ins in the Gulf of Mexico.'' Oil has remained above $80 for much of the last three weeks, despite OPEC's agreement on Sept. 11 to boost output by 500,000 bpd from Nov. 1. Oil ministers from Venezuela and Qatar have brushed off the need for a further output rise.

Qatar's Abdullah al-Attiyah said speculative investment was responsible for $80-plus oil.

And a top Iranian oil official said on Wednesday the weak dollar would keep oil prices near record highs.

''The price of oil is not going to drop,'' said Hojatollah Ghanimifard, executive director of the National Iranian Oil Company. ''... (The price) is not going to change unless the dollar corrects itself.'' A rebound from record lows for the dollar added pressure to prices on Tuesday, as did revised data showing oil demand in the world's top consumer fell 0.5 percent in July from the year before, far weaker than initially reported.

''At this level prices are starting to hurt demand, especially in the developed countries,'' said Tony Nunan of Mitsubishi Corp. ''If you're thinking there's lower demand and higher OPEC output then why not take your profits now?'' Although much of the hurricane season has passed, oil traders remain on alert for any sign of foul weather that could disrupt oil production or refining in the Gulf of Mexico.

A stormy weather system in the eastern Gulf could form into a cyclone, but is not expected to affect energy operations, forecasters and company officials said.


Please Wait while comments are loading...