The price of New York crude steadied near to its all-time high of almost 79 dollars a barrel Wednesday ahead of key data on US inventories and after the OPEC cartel decided to hike its daily oil output.
New York’s main futures contract, light sweet crude for delivery in October dipped four cents to 78.19 dollars per barrel.
On Tuesday it struck a record close of 78.23 dollars. New York crude’s intra-day high is 78.77 dollars, which was reached on August 1.
In London on Wednesday, the price of Brent North Sea crude for October delivery edged down one cent to 76.37 dollars per barrel.
The market was awaiting the latest weekly inventory report from the US Energy Information Administration, due at 1430 GMT.
“The EIA data will assume a new significance in the wake of the (OPEC) announcement with further falls in crude stocks a trigger for further (price) gains,” said Bank of Ireland analyst Paul Harris.
The decision on Tuesday by the Organization of Petroleum Exporting Countries to pump an extra 500,000 barrels per day from the start of November was intended to signal the cartel’s willingness to respond to supply fears in consumer countries.
However because of ongoing turbulence across financial markets, the International Energy Agency on Wednesday lowered its predictions of global oil demand for this year and 2008.
The IEA, which acts as energy policy advisor to industrialised countries, reduced its demand forecast to 85.9 million barrels per day in 2007 and 88 million bpd in 2008 from its prediction last month of 86 and 88.2 million bpd respectively.
“Looking ahead, continued high prices may further dent demand,” it said in its latest monthly report.
In recent months, oil prices have been driven higher by unrest in crude-producing nations — notably Iran and Nigeria — as well as a lack of global refining capacity and fear of hurricane damage to Atlantic oil installations.
OPEC oil exporters on Tuesday agreed to increase their combined output by about 2.0 percent from next month. The Organization of Petroleum Exporting Countries said it would pump an extra 500,000 barrels of oil per day from the start of November.
Analyst David Kirsch from Washington-based consultancy PFC Energy said the OPEC decision “will take some of the near-term supply concerns off, but shouldn’t put too much downward pressure on markets.”
Saudi Arabia appeared to have forced through the increase in the face of stiff opposition from the majority of its OPEC partners.
The Organization of Petroleum Exporting Countries produces about a third of global oil supplies.