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Crude oil gains as IEA raises forecast

Oil climbed for the first day in three in New York after the International Energy Agency raised its global demand forecasts and China reported crude imports reached a record.

The IEA increased its forecasts for worldwide crude use by 300,000 barrels a day this year and next.

Futures rose as much as 1.1pc after Chinese customs data showed the world’s largest energy consumer imported a record 23.3 million metric tons of crude in September.

“The IEA report is a very strong one that acknowledges the strength of the demand seen over the last few months,” said Amrita Sen, an analyst at Barclays Capital, the investment banking arm of Barclays Plc.

“In particular, OECD oil demand has shown very strong recovery and the IEA seems to be taking that into account.”

Crude for November delivery rose as much as $1.26 to $82.93 a barrel in electronic trading on the New York Mercantile Exchange. It was at $82.75 at 11:24am London time.

Brent crude for November settlement on the ICE Futures Europe exchange in London gained 84 cents to $84.42 a barrel.

China, the world’s largest energy consumer, imported a record 23.3 million metric tons of crude last month to meet increased domestic demand, according to preliminary data today from the General Administration of Customs.

IEA forecast

Global oil demand will be higher than previously estimated this year and next amid signs of “apparently resurgent” demand in the US, Germany and Japan in the last quarter, the IEA said today in its monthly Oil Market Report.

Crude use worldwide will average 86.9 million barrels a day in 2010 and 88.2 million barrels a day in 2011, the Paris-based energy advisory agency said. That’s 300,000 barrels a day more than last month’s forecast for both those years.

Futures also rose as the dollar weakened against the euro and other currencies, reducing the appeal of commodities, amid speculation that the US Federal Reserve will conduct another round of quantitative easing.

The Dollar Index, used by IntercontinentalExchange Inc to track the greenback against currencies including the euro, yen and Swiss franc, slid 0.4pc to 77.052 today. It touched 76.906 on October 7, the lowest since January 15.

“At the moment we see a weaker dollar because there is the option that the Fed will do QE2 at the beginning of November,” said Sintje Diek, an analyst at HSH Nordbank in Hamburg. “That has an effect on the oil markets.”