MercoPress. South Atlantic News Agency

Oil price climbs on expectations of global economic recovery

Prices have doubled since last December lows

Oil prices closed Thursday above 72 US dollars a barrel following the meeting of the producers' cartel OPEC on Wednesday and the International Energy Agency forecast of stronger demand as the global economy recovers.

OPEC decided not to change the volume of oil being produced by its members stating “there are signs that economic recovery is underway” even when there was “great concern” about the pace of the recovery.

On Thursday the International Energy Agency said it expected global oil demand to increase as the world's economy recovered.

“Global oil use will be almost 0.5 million barrels per day (bpd) higher than expected this year and next on stronger-than-expected demand in North America and Asia” said the IEA in its monthly oil market report.

”Crude has been in a range trade since June. We believe the ultimately break will be to the topside (toward and above 80 US dollars) but do not have the evidence to assume this upside move is yet in play“ Barclays Capital wrote in a research note.

Meantime the US dollar hovered close to its lowest in almost a year against a basket of major currencies, as firmer share and commodity prices undermined flows into the lower-yielding US currency.

”Since the market remains oversupplied and given the downside risks associated with the extremely fragile recovery, [OPEC] once again agreed to leave current production levels unchanged for the time being” said the OPEC statement.

Oil prices have roughly doubled from their lows last December, but are half the levels reached earlier in 2008. OPEC countries supply 35% of the world's crude oil and during August their exports averaged 28.8 million bpd.

Russia’s Gazprom chief executive Alexei Miller said on Wednesday the oil price could hit 100 USD next year.

Meanwhile US crude stocks shrank much more than expected last week, as imports fell and refiners boosted demand ahead of the Labour Day holiday, the American Petroleum Institute said this week.