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Oil rose yesterday, clawing its way out of a slump from a record high set last month, following signs that Opec will probably resist consumer nations' calls to pump more crude.
Several members of the cartel have said they believe the world oil market is well supplied and there is no need for the group to open up the spigots when it meets in Abu Dhabi today.
US crude rose 34c a barrel to US$89.65, bouncing off a five-week low of US$87.14 hit in the previous session. London Brent crude was up US24c at US$90.04.
Prices remain down more than 10 per cent from the November 21 peak of US$99.29 a barrel as widespread worries that the weakening US economy could cut into world energy demand have stemmed crude's record rally.
But the slump in prices and the dimming demand outlook has also made Opec more reluctant to raise output.
"Increasing production now is not necessarily the best time, because by the time the oil hits the market we're already well into the peak demand season," said Tobin Gorey, a commodities strategist at Australia's Commonwealth Bank.
Consuming nations have called on Opec to put more oil on the market, to stem the decline in inventories ahead of the northern hemisphere winter and to temper prices.
But Opec ministers, who agreed this year to raise production by 500,000 barrels a day effective November 1, are adamant that oil's surge to record levels had been driven by speculators and not by a shortfall in supplies.
A Reuters poll of 23 banks, traders and funds on Monday showed 12 participants did not expect Opec to raise output. Late last week, a similar poll had 18 out of 24 participants expecting an increase of around 500,000 barrels per day.
Adding support for prices, Opec's November production levels, excluding Iran and Angola, failed to reach the target set in September, when the cartel agreed to increase supplies by 500,000 bpd, a Reuters survey found.
Oil prices had been under pressure on Monday after the giant Canada-US Enbridge pipeline reopened sooner than expected after a fire last week.
Enbridge said the last of four affected pipeline had restarted.
A poll of analysts showed crude stockpiles probably fell 800,000 barrels in the week to November 30 due to the disruption. Distillate stocks were seen down 300,000 barrels and petrol inventories up 1.3 million barrels.
- Reuters
