Oil prices tick up amid freeze in US, Europe

December 10, 2010 | 10:02

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Freezing temperatures in Europe and the United States and sharp falls in US energy inventories helped push oil prices slightly higher Thursday as traders also awaited key data from China.

New York's main contract, light sweet crude for January, gained nine cents to close at $88.37 a barrel.

In London, Brent North Sea crude for delivery in January climbed 22 cents to settle at $90.99 a barrel, as icy weather increased demand for heating fuel.

"According to the latest forecasts, low northern hemisphere temperatures will continue to support the oil market for the rest of December," said Filip Petersson, an analyst at SEB Commodity Research.

Traders were also taking positions ahead of the release of data on China's economy on Saturday which is expected to underscore fears of soaring inflation in the world's second-largest oil consumer, according to Lind-Waldock analyst Rich Ilczyszyn.

"If China's inflation is above 4.5 per cent, perhaps they will adjust their (interest) rates and try to slow their economy down," he said.

Investors were focused on the outcome of Friday's meeting of the Organization of the Petroleum Exporting Countries (OPEC). The cartel, which pumps about 40 per cent of global oil, is expected to maintain its output unchanged.

Prices also remained supported by official data showing a sharper-than-expected decline in crude oil reserves in the United States, the world's biggest oil consumer.

The data published on Wednesday showed stockpiles shrinking by 3.8 million barrels in the week ending December 3, much more than analyst forecasts of a 1.2-million-barrel drop.

AFP

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