Oil up $3 on forecasts for U.S. inventory drop, OPEC
NEW YORK (Reuters) - Oil jumped more than 3 percent on Wednesday on expectations of falling U.S. inventories as OPEC brushed off calls to raise supplies.
U.S. crude settled up $2.92 at $94.09 a barrel after moving as high as $94.37. London Brent crude rose $2.53 to $91.36 a barrel.
U.S. government data to be released on Thursday is expected to show crude stocks in the world's top consumer fell 800,000 barrels last week as colder weather hit the giant U.S. Northeast heating oil market, an analyst poll showed.
Additional support came from the weakening dollar, which fell again against the euro as continued worries that a struggling U.S. housing sector and lingering credit problems weighed on sentiment.
"The weaker dollar is helping and the market is also looking forward to tomorrow's data," said Jim Ritterbusch, president of Ritterbusch & Associates.
U.S. Energy Secretary Samuel Bodman has asked oil cartel OPEC to boost production because of shrinking oil inventory levels in developed economies.
Falling stocks helped push oil prices to a record $98.62 a barrel last week, but members of the producer group have blamed record prices on speculation and not supply shortages.
"At this time, frankly, we don't see that we should add more oil," said Secretary-General Abdullah al-Badri ahead of the OPEC heads of state summit in Riyadh.
Saudi Arabia's oil minister Ali al-Naimi has confirmed that OPEC will not discuss raising crude output at a heads-of-state meeting on November 17-18. OPEC's next official policy meeting is not until December 5 in Abu Dhabi.
The head of the International Energy Agency agreed speculation has helped drive up prices, but said tight fundamentals were the underlying cause.
"We think that speculation has played some impact on the price levels," Nobuo Tanaka told Reuters.
"Our judgment is that speculation doesn't decide the direction of the market," Tanaka said. "The direction ... (is) decided by the fundamentals of the market. The supply-demand situation. The current situation is that the market is getting tight."
Concerns about demand helped knock oil off last week's highs, with the International Energy Agency's latest monthly report cutting growth predictions.
(Additional reporting by Jane Merriman in London, Fayen Wong in Sydney and Annika Breidthardt in Singapore; editing by Christian Wiessner)
