Oil above $82 after IEA raises demand forecasts

[March 12, 2010]  PARIS (AP) -- Oil prices moved above $82 a barrel Friday after the International Energy Agency brightened its outlook for world demand, predicting a surge in Asian economic activity will make up for a fall in developed countries.

By early afternoon in Europe, benchmark crude for April delivery was up 57 cents to $82.68 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 2 cents to settle at $82.11 on Thursday.

The Paris-based IEA predicted in its monthly report Friday that oil demand will average 86.6 million barrels a day this year, or 1.6 million barrels a day more than in 2009. The IEA's previous report, in February, had estimated daily demand in 2010 of 86.5 million barrels.

Oil demand in developed economies will fall 0.3 percent in 2010, but this will be offset by higher demand in Asia, the IEA said.

Crude has risen from $69.59 a barrel on Feb. 5 as economic data pointed to slow but steady U.S. economic growth.

Analysts were cautious about the strength of oil's rise, however.

"Economic data is still inconclusive and while the market has been creeping higher, momentum seems to be sporadic," MF Global in New York said in a report.

"The oil fundamental data points are not strong enough to justify a move above $85 a barrel," said Olivier Jakob of Petromatrix in Switzerland.

In other Nymex trading in April contracts, heating oil rose 1.29 cent to $2.1279 a gallon, and gasoline gained 1.06 cents to $2.2826 a gallon. Natural gas was up 2.2 cents to $4.462 per 1,000 cubic feet.

In London, Brent crude was up 41 cents at $80.88 on the ICE futures exchange.

[Associated Press; By BARRY HATTON]

Associated Press writer Alex Kennedy in Singapore contributed to this report.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.