LONDON (Reuters) – Oil rose further above $81 a barrel on Thursday, marking a month at record high prices that the International Energy Agency (IEA) says are acting as a brake on fuel demand.
Costly oil is starting to tempt consumers to switch oil for cheaper natural gas and estimates for economic growth have been trimmed, said the IEA, adviser to industrialized countries, in its monthly report.
U.S. crude rose 33 cents to $81.63 a barrel by 4:56 a.m. EDT. London Brent crude rose 35 cents to $78.95.
Oil is hovering near its highest level in two weeks, as lower stocks of heating oil have heightened concerns of a potential supply crunch this winter.
U.S. weekly oil inventory data due out later on Thursday are expected to show a 400,000-barrel decline in distillate stocks, which include heating fuel. European oil inventories fell in September, data showed this week.
Crude inventories are expected to have risen by 900,000 barrels, while gasoline stocks edged up by 100,000 barrels.
Oil prices have been holding near $80 since striking a record of $83.90 in September, as investors shrug off OPEC’s pledge to add 500,000 barrels per day (bpd) more oil to the market next month.
Top exporter Saudi Arabia made good on that pledge on Thursday, telling top Asian customers that it would increase shipments by about a tenth.
Renewed U.S. dollar weakness has added to oil’s latest gains. It steadied on Thursday, but remains near an all-time low against the euro, a factor that has spurred buying in dollar-denominated commodities markets as a hedge.