World oil prices drifted lower on Monday in thin trade after
jumping close to $100 per barrel last week, while OPEC forecast
higher demand growth for this year.
Brent North Sea crude for delivery in March slipped 73 cents to
$97.65 in late afternoon London trade. The February contract spiked
to $99.20 on Friday ahead of its expiry.
New York's main contract, light sweet crude for February delivery
dropped 56 cents to $90.98 a barrel.
Trading volumes were light given the the Martin Luther King Day
public holiday in the United States. Floor trading was shut in New
York while electronic deals will finish early.
"Crude oil prices have recently consolidated around the $91 per
barrel area as the uncertain conditions in the eurozone prompted
investors to some profit-taking," Sucden analyst Myrto Sokou
said.
"However, the recent upside momentum is likely to continue amid
expectations of a strong corporate earnings results season."
Optimism about the global economic recovery and interest from
bullish investors have been the twin drivers of the gains in prices
over the past week, analysts said.
"Crude futures are quite close to $100 and speculative traders have
generally gone bullish on the market," said Victor Shum, a
Singapore-based analyst with energy consultancy Purvin and
Gertz.
"There are many investors betting on accelerating global economic
recovery and so we have got these high prices," he told AFP.
The rise in global oil prices has been attributed to a harsh winter
hitting Europe and parts of North America, as well as growth in
China and other developing nations.
The OPEC oil cartel, which pumps 40 percent of world crude, revised
upwards its 2011 world demand growth estimate on Monday, given the
pace of global economic recovery and cold winter weather in the
northern hemisphere.
The Organisation of Petroleum Exporting Countries said it was
pencilling in world oil demand growth of 1.23 million barrels per
day (bpd) or 1.43 percent to 87.32 million bpd for this year,
compared with 1.37 percent previously.
"The magnitude and the speed of the world economic recovery will
have a remarkable impact on world oil demand this year," OPEC said
in its latest monthly bulletin.
Crude prices first touched $100 a barrel in January 2008 and major
oil producer Iran said Sunday it was possible that this would
happen again.
"The price of $100 is not unrealistic in this situation," Iran's
Oil Minister Masoud Mirkazemi, who currently heads OPEC, told
reporters on Sunday.
"Even if the oil price crosses $100 a barrel there is no need for
an emergency OPEC meeting. Some OPEC members believe there is no
need for an emergency meeting even if oil reaches 110 or 120
dollars a barrel."
Iran is OPEC's second largest crude exporter behind Saudi Arabia
and holds the world's second largest gas reserves.