LONDON (Reuters) – Oil rose above $80 a barrel on Wednesday after three days of losses as investors expected weekly U.S. data to show crude stocks declining and raising the prospects for a winter supply crunch.
U.S. crude gained 23 cents to $80.28 a barrel by 0903 GMT. Prices had fallen close to $3 from a near record high late last week on concerns the global credit crunch would stymie U.S. and European economic growth.
Brent crude was off 7 cents at $77.31.
The focus will shift later on Wednesday to U.S. inventory data that are expected to show an 800,000-barrel drop in crude stocks. Distillate stocks, including heating oil, are expected to have risen by 1 million barrels.
Oil has remained above $80 for much of the last three weeks, despite OPEC’s agreement on September 11 to boost output by 500,000 bpd from November 1. Oil ministers from Venezuela and Qatar have brushed off the need for a further output rise.
Qatar’s Abdullah al-Attiyah said speculative investment was responsible for $80-plus oil.
And a top Iranian oil official said on Wednesday the weak dollar would keep oil prices near record highs.
“The price of oil is not going to drop,” said Hojatollah Ghanimifard, executive director of the National Iranian Oil Company. “… (The price) is not going to change unless the dollar corrects itself.”
A rebound from record lows for the U.S. dollar added pressure to prices on Tuesday, as did revised data showing oil demand in the world’s top consumer fell 0.5 percent in July from the year before, far weaker than initially reported.
“At this level prices are starting to hurt demand, especially in the developed countries,” said Tony Nunan of Mitsubishi Corp. “If you’re thinking there’s lower demand and higher OPEC output then why not take your profits now?”
Although much of the hurricane season has passed, oil traders remain on high alert for any sign of foul weather that could disrupt oil production or refining in the Gulf of Mexico.
A stormy weather system in the eastern Gulf could form into a cyclone, but is not expected to affect energy operations, forecasters and company officials said.