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Oil prices at three-week highs on cold weather, OPEC
AFP
NEW YORK
Petroleumworld.com 11 29 06World crude prices rose to three-week highs on Tuesday on forecasts of a US cold snap and an OPEC output cut in mid-December, analysts said.
Prices were supported also by a weak dollar and geopolitical unrest, they added.
In New York, light sweet crude for delivery in January rose 67 cents to close at 60.99 dollars a barrel.
In London, Brent North Sea crude for January delivery climbed 77 cents to settle at 61.21 dollars a barrel.
Both contracts rose to their highest levels since November 9 during the trading session.
"Price support is coming from a range of different factors at present, including forecasts of a change to below-normal temperatures in the US northeast for later this week and early next," Barclays Capital analyst Kevin Norrish said.
He said crude futures were boosted also by expectation that dollar weakness could encourage major consumers like Germany to restock products such as heating oil as winter deepens.
And Norrish noted that "Saudi Arabia has once again warned of the strong likelihood of further production cuts to be decided upon by OPEC in December".
The Organization of the Petroleum Exporting Countries meets in Nigeria on December 14. At its last meeting in October, the cartel agreed to slash its oil output by 1.2 million barrels per day from the start of November to help support weakening prices.
"However, any price increases will be tempered by OPEC's -- members other than Saudi Arabia -- credibility problems, a slowing US economy and a rise in spare capacity," Bart Melek at BMO Capital Markets said.
Tony Nunan, manager of energy risk management with Mitsubishi Corp. in Tokyo, cited unrest in oil-producing regions as an additional factor pushing up prices on Tuesday.
"The geopolitical factors seem to be resurfacing in the market. The unrest in Nigeria and the tension in the Middle East have been constant, chronic problems and could affect the market at any point," he said.
"Also there is some market concern about the repeat of a spike in oil prices caused by the problems in Lebanon."
Oil prices hit record highs above 78 dollars in July during Israel's 34-day war with the Hezbollah militia in Lebanon. Tensions have escalated again with the assassination of Lebanon's anti-Syria industry minister Pierre Gemayel.
Despite the numerous factors supporting prices, "we doubt that enough has yet altered to change the strong negative sentiment for oil markets just yet and so expect prices to continue to struggle to make a concerted break higher from current levels", Norrish of Barclays added.
AFP 28 2113 GMT 11 06
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