Oil rises to near $89 ahead of OPEC meeting

[December 10, 2010]  SINGAPORE (AP) -- Oil prices rose to near $89 a barrel Friday in Asia as traders looked to this weekend's OPEC meeting for any changes to the cartel's crude production policy.

Benchmark oil for January delivery was up 40 cents to $88.77 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added 9 cents to settle at $88.37 on Thursday.

Analysts say officials of the 12-nation Organization of Petroleum Exporting Countries will likely leave the group's production quotas unchanged at Saturday's meeting in Ecuador.

OPEC, which is responsible for 35 percent of global oil production, has not changed its output quotas since late 2008. Last month, Saudi oil minister Ali Naimi said that oil between $70 and $90 per barrel was tolerable for consumers.

Some analysts are concerned that sluggish economic growth in developed countries may not justify high prices for commodities such as oil, which reached a two-year high earlier this week.

"The threat of bubbles is greatest in commodity markets," Capital Economics said in a report. "If commodity prices are going to be sustained at these levels, final demand from consumers has to be consistently strong too."

"Since the major developed economies are only gradually recovering from recession, this is placing an awful lot of weight on the rebound in emerging economies."

In other Nymex trading in January contracts, heating oil rose 1.5 cents to $2.48 a gallon, gasoline futures added 0.2 cent to $2.34 a gallon and natural gas slipped 0.5 cent to $4.43 per 1,000 cubic feet.

In London, Brent crude rose 50 cents to $91.49 a barrel on the ICE Futures exchange.

[Associated Press; By ALEX KENNEDY]

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