Oil prices advance before US energy report

With some US markets closed on Wednesday for Veterans Day, the DoE energy report is due one day later than normal.

World oil prices rose on Wednesday as traders digested the latest demand growth forecasts from the OPEC crude producers' cartel, and awaited this week's snapshot of US energy inventories.

New York's main contract, light sweet crude for delivery in December, added 43 cents to 79.48 dollars a barrel.

Brent North Sea crude for December delivery gained 55 cents to 78.05 dollars per barrel in London trading.

- Oil continues to flirt with the 80-dollar level and not quite having the conviction to push on higher - said Capital Spreads analyst Simon Denham.

In Vienna on Wednesday, OPEC left broadly unchanged its forecasts for world oil demand growth both this year and next year, warning of downside risks should economic recovery remain weak.

World oil demand in 2009 was expected to contract by 1.39 million barrels per day (bpd) to 84.31 millilon bpd, the Organization of Petroleum Exporting Countries said in its November report.

A month ago, it had been pencilling in only a fractionally bigger contraction of 1.41 million bpd for this year.

Next year, world oil demand was expected to grow by 0.75 million barrels per day (bpd) to average 85.07 million bpd.

That figure, too, was almost unchanged from the previous forecast for growth of 0.70 million bpd.

- Although most of signs are pointing toward higher oil demand, the downward risk factors are weighing on the forecast - the report cautioned.

- The low base in world oil demand in 2009 is suggesting a stronger increase in oil demand growth for 2010. However, a potentially weak economic recovery along with higher oil prices are the two main factors that may dampen world oil demand in the coming year. -

Should oil prices - increase and be sustained above the current level, oil demand growth will be pushed down by more than one percent - in developed countries, it said.

On Thursday, meanwhile, the US government's Department of Energy (DoE) will publish a report on American crude oil stockpiles for the week ending November 6.

With some US markets closed on Wednesday for Veterans' Day, the DoE energy report is due one day later than normal.

The DoE was expected to report on Thursday that American crude reserves rose 200,000 barrels last week, according to analysts polled by Dow Jones Newswires.

Crude futures had fallen on Tuesday as Hurricane Ida fizzled into a tropical depression, easing worries about the potential threat to petroleum installations in the US Gulf of Mexico.

Oil and gas operations have now restarted in the area after closing down ahead of the onset of Hurricane Ida, the Commonwealth Bank of Australia said in a report.