Wednesday, December 23, 2009

Oil holds above $74 after OPEC output unchanged


SINGAPORE: Oil prices held above $74 a barrel Wednesday in Asia after OPEC left output levels unchanged and a report showed U.S. crude inventories fell last week.

Benchmark crude for February delivery was down 7 cents to $74.33 at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 68 cents to settle at $74.40 on Tuesday.

The Organization of Petroleum Exporting Countries said Tuesday that the 12-nation cartel won't change production quotas, a move widely expected by investors. OPEC leaders called on group members to adhere more closely to current quotas and reduce cheating.

Prices were boosted by signs U.S. oil demand may be picking up. U.S. crude inventories fell more than expected last week, the American Petroleum Institute said late Tuesday. Crude stocks fell 3.7 million barrels while analysts had expected a drop of 2.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Department's Energy Information Administration plans to announce its inventory report later Wednesday.

In other Nymex trading in January contracts, heating oil was little changed at $1.95 while gasoline rose 1.1 cent to $1.90. Natural gas rose 1.3 cents to $5.73 per 1,000 cubic feet.

In London, Brent crude for February delivery fell 9 cents to $73.37 on the ICE Futures exchange.

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