Oil prices rebound, as OPEC predicts fresh highs


Posted at Jun 26 2008 08:04 PM | Updated as of Jun 27 2008 04:04 AM

Agence France-Presse

LONDON - Oil prices rose on Thursday, supported by risks to unrest in producer nations and a weak dollar, after sliding a day earlier on easing concerns about US energy supplies, analysts said.

The president of OPEC, Algerian Energy Minister Chakib Khelil, predicted Thursday that oil prices could rise to 150-170 dollars a barrel during the northern hemisphere summer.

Last week crude futures hit record highs of close to 140 dollars.

New York's main oil futures contract, light sweet crude for August delivery, was up 44 cents at 134.99 dollars per barrel in electronic deals following the forecast made by Khelil to the television news channel France 24.

Brent North Sea crude for August climbed 47 cents to 134.80 dollars.

"Concerns over potential geopolitical conflicts continue to support crude markets," Sucden analyst Nimit Khamar said on Thursday.

Crude futures had closed down 3.50 dollars on Wednesday after official data revealed an unexpected rise in crude stockpiles in the United States, the world's biggest energy consumer, traders said.

The US Department of Energy said that stockpiles of crude had risen for the first time in six weeks, by 800,000 barrels, in the week to June 20. Analysts had expected a drop of 1.1 million barrels.

"The report also showed four week average gasoline demand is 2.1 percent down from a year ago, this goes to show more and more people are reacting to high oil prices," said Khamar from the Sucden broker firm in London.

Meanwhile in his interview with France 24, Khelil said: "I predict probably prices of 150 to 170 dollars this summer. It (the market) will probably fall a bit towards the end of the year."

The OPEC president added that a weak dollar was the main cause of surging oil prices. A struggling US currency makes goods priced in the dollar cheaper for foreign buyers, thus pushing up demand.

Khelil also said that the Organization of Petroleum Exporting Countries was ready to meet any additional demand for crude in the future.

OPEC, led by Saudi Arabia, produces about 40 percent of the world's oil.

- Dow Jones Newswires contributed to this story -