Demand and Supply Issues Force Oil Over $54 a Barrel
e oil rose to a record for a sixth day, reaching $54.45 a barrel in New York, after the International Energy Agency said demand this year is rising faster than expected, increasing concern about U.S. supplies.
``Strong demand through the end of the year will tighten supplies and capacity further,'' said Jason Kenney, an analyst at ING Financial Markets in Edinburgh. ``A terror outrage that takes out supply from the market could send prices bursting through $60 and beyond.'' They are up more than $10 a barrel in the past month.
World oil use will jump by 2.71 million barrels a day to 82.4 million barrels a day this year, the IEA said in a monthly report, up 190,000 barrels a day from what it predicted last month. The Agency cut its forecast for 2005 demand growth because oil prices, up 66 percent this year, will restrain the economy.
Crude oil for November delivery was at $54.04 a barrel in electronic trading on the New York Mercantile Exchange at 12:37 p.m. in London, up 0.8 percent today and 26 percent since Hurricane Ivan forced Gulf of Mexico producers to cut output. Storm damage has reduced U.S. pumping in the region by at least a quarter for a month and imports have slowed.
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