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LONDON: Oil recovered somewhat on Tuesday, in line with stronger equity markets, and after OPEC predicted crude demand growth would settle this year before turning positive in 2010.In London trading, Brent North Sea crude for August delivery added 75 cents to reach 61.44 dollars a barrel.
New York’s main contract, light sweet crude for delivery in August also rose 75 cents to 60.44 dollars.
Europe’s main stock markets rallied Tuesday, mirroring earlier gains in Asia and overnight on Wall Street, as investor optimism grew ahead of this week’s major data releases and results from troubled US banks.
“Crude futures were higher as risk appetite improved following a rally in equity markets,” added analyst Nimit Khamar at the Sucden Financial Research brokerage in London.
“The economic data on tap combined with a collection of heavyweight US corporate earnings results out this week will be keenly monitored by market participants to see whether a recovery is in the works.”
Oil had fallen on Monday on concerns over the pace of recovery in the global economy, especially in the United States.
But in Vienna on Tuesday, the OPEC crude producers’ cartel painted a brighter picture of worldwide demand for energy.
“World oil demand is settling down in line with the current world economic situation,” the Organization of Petroleum Exporting Countries wrote in its latest monthly report.
And “after two consecutive years of negative growth … world oil demand is expected to turn positive in 2010. (It) is projected to show a moderate increase of 0.5 million barrels per day (bpd)” or 0.59 percent to 84.34 million bpd.
For this year, OPEC estimated that demand would contract by 1.65 million barrels per day (bpd) or 1.93 percent — only a marginal downward revision from its earlier forecast.
In its previous monthly bulletin released in June, OPEC had been pencilling in a contraction of 1.62 million bpd or 1.89 percent for 2009.
Next year, “the bulk of the recovery in oil demand is projected to be seen in the second half of the year when the global economic rebound strengthens.”
Growth was expected to come mostly from developing economies such as China, India, the Middle East and Latin America.
One year ago, oil prices had struck record peaks above 147 dollars — but they have since collapsed in line with slumping energy demand.
On July 11, 2008, New York crude had rocketed to a record high point of 147.27 dollars and London Brent struck a historic peak of 147.50 on heightened concerns about supplies.
But over the past 12 months, prices have nosedived, striking 32 dollars in December before clawing back some ground on economic recovery hopes.