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| Oil prices rise on growth hopes | Oil prices rise on growth hopes |
| (about 5 hours later) | |
| Oil prices have risen strongly after a forecast of rising demand next year, and hopes of a production cut by Opec. | |
| The International Energy Agency (IEA) said world demand for oil would grow in 2009 - but only after shrinking this year for the first time since 1983. | |
| Opec is expected to agree to cuts of at least 1 million barrels of oil a day at its next meeting on 17 December. | Opec is expected to agree to cuts of at least 1 million barrels of oil a day at its next meeting on 17 December. |
| US crude was up $3.25 at $46.77 a barrel, while Brent crude was up $3.70 at $46.10 in afternoon trade in London. | |
| Saudi Arabia has already signalled that it would cut its oil supplies substantially next month. | |
| However, while most analysts expect a cut of 1 million barrels a day at Opec's next meeting in Oran, Algeria, some think the cuts could be as high as 2 million barrels a day. | However, while most analysts expect a cut of 1 million barrels a day at Opec's next meeting in Oran, Algeria, some think the cuts could be as high as 2 million barrels a day. |
| "It is clear that Opec has to act to stabilise oil prices, it must cut production decisively and quickly," said Sintje Diek, oil analyst at HSH Nordbank in Hamburg. | "It is clear that Opec has to act to stabilise oil prices, it must cut production decisively and quickly," said Sintje Diek, oil analyst at HSH Nordbank in Hamburg. |
| Demand forecasts | Demand forecasts |
| In its latest monthly report, the IEA revised downwards its forecast for this year, but said in 2009 demand would rebound to 86.3 million barrels a day. | In its latest monthly report, the IEA revised downwards its forecast for this year, but said in 2009 demand would rebound to 86.3 million barrels a day. |
| It said this was based on the International Monetary Fund's assumption that the global economy would gradually recover in the second half of the year, with developing countries still expanding their economies. | It said this was based on the International Monetary Fund's assumption that the global economy would gradually recover in the second half of the year, with developing countries still expanding their economies. |
| "Our working scenario rests on assumed resilience outside of the Organisation for Economic Co-operation and Development (OECD) regions, albeit with slower growth than in the past five years," the IEA said in its monthly report. | "Our working scenario rests on assumed resilience outside of the Organisation for Economic Co-operation and Development (OECD) regions, albeit with slower growth than in the past five years," the IEA said in its monthly report. |
| David Fyfe, of the IEA, said its forecast still demonstrated global economic weakness in 2009. | David Fyfe, of the IEA, said its forecast still demonstrated global economic weakness in 2009. |
| "It's marginally higher growth from a lower base," he said. | "It's marginally higher growth from a lower base," he said. |
| Yet the IEA's view is in contrast to that of the US Energy Information Administration, which on Tuesday said that demand was expected to shrink in 2009. | |
| Oil prices have fallen by more than $100 a barrel from a record high of $147 reached in the summer, because of weakening global demand. | Oil prices have fallen by more than $100 a barrel from a record high of $147 reached in the summer, because of weakening global demand. |