Oil rose to above $44 a barrel today, supported by reports of supply cuts by OPEC producers but traders were wary ahead of US data expected to show a build in crude inventories.
US crude oil stocks are expected to have risen by 1.4 million barrels and gasoline by 1.9 million barrels in weekly data due later today.
Traders were looking for news of the oil storage levels at the Cushing, Oklahoma, delivery point for NYMEX crude, which have been a drag on the nearby contract for US crude futures.
US light crude for March delivery rose $1.16 to a high of $44.71 by 9.15am. Yesterday the contract jumped $2.71 to its highest closing price since January 6th. London Brent crude was up 95 cents at $45.97 a barrel.
The oil market is paying close attention to crude supplied by members of the Organisation of the Petroleum Exporting Countries, which have pledged to cut output in an attempt to bolster global markets.
Opec president and Angolan oil minister Botelho de Vasconcelos told Reuters this week the 12-member group was fully enforcing its deepest ever oil supply curbs and this should be enough to boost prices.
But analysts say the 4.2 million barrels per day (bpd) of cuts that Opec has promised since September may not be enough to turn the tide on a market that has plunged from a record high above $147 a barrel in July, as the global economic crisis hits consumption.
Global oil demand is expected to contract more sharply this year than previously expected, as the deepening economic crisis spreads to the developing world, a Reuters poll said yesterday. World oil demand will decline by 430,000 bpd in 2009 to 85.43 million bpd, it said.
The International Monetary Fund is set to sharply cut growth forecasts this month, Managing Director Dominique Strauss-Kahn said yesterday.
Reuters