Thursday February 5, 11:59 AM
Oil prices rise above $45 in London
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LONDON (AFP) - Oil prices rose above 45 dollars in London but fell slightly in New York as traders assessed the outlook for energy demand after news that US crude stockpiles had soared last week, analysts said.
Brent North Sea crude for delivery in March rose 88 cents to 45.10 dollars a barrel.
New York's main futures contract, light sweet crude for March, dipped three cents to 40.28 dollars a barrel.
Crude futures traded mixed for a second day running after the US government's Energy Information Administration (EIA) on Wednesday reported a huge rise in crude stockpiles last week, underlining poor demand in the the world's biggest energy consumer.
"The EIA reported yet another astonishing rise in US oil stocks, highlighting lower demand and increasing imports," said VTB Capital analyst Andrey Kryuchenkov.
"However, it was somewhat balanced out by a smaller than expected increase in gasoline inventories and a larger than expected draw in distillate inventories... as seasonal demand continues to influence the market."
The EIA said that crude stockpiles had soared by 7.2 million barrels last week, more than double the 2.9 million barrels forecast by analysts.
It was the fifth consecutive week of gains, and the sharp rise underlined slack demand amid the global financial crisis that has brought the world economy to a near-halt.
Stockpiles of US distillates, which include heating fuel, dropped by 1.4 million barrels last week. The drop beat expectations of a reduction totalling only 600,000 barrels.
Earlier this week, crude prices won some support from strikes at refineries and a cold snap in Western Europe, but gains were capped by concern about the impact of the slowdown.
Analysts noted that oil demand was still falling despite production cuts by the Organization of the Petroleum Exporting Countries.
"The downward momentum in pricing has been broken," said Victor Shum, senior principal in Singapore with energy consultants Purvin and Gertz.
He said the 40-dollar level "seems to be a very strong support".
After plunging from record highs above 147 dollars last July, oil prices touched multi-year lows in December, at one point nearing 32 dollars a barrel.
The OPEC cartel signalled last week that it would consider more reductions in output.
OPEC, which pumps about 40 percent of the world's oil, announced production cuts totalling 4.2 million barrels per day late last year in an attempt to prevent fresh price falls.
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