11 October 2005, 15:12  Oil on rise after IEA says demand resilient

Oil climbed back above $62 on Tuesday after the International Energy Agency said it saw no lasting damage to demand that has pushed producers and refiners to the limit and could lead to fuel shortages this winter. There have been signs recently that persistent high prices are taking their toll on the economies of the world's big consumers. Hurricanes that battered U.S. Gulf rigs and refiners catapulted oil to new record highs, finally crimping fuel use. But the IEA, adviser to 26 industrialised nations, forecast demand growth would quicken to 1.75 million barrels per day next year "due to a rebound from the largely temporary impact of Hurricanes Katrina and Rita and a recovery in Chinese demand." Winter fuel supplies should be ample provided refiners avoiding unplanned shutdowns, postponed maintenance and kept working flat out, the IEA said. Some analysts were pessimistic. "The chance of all that being met the entire winter is zero," said Deborah White, senior energy analyst at SG Commodities in Paris. U.S. crude oil futures were 87 cents higher at $62.67 a barrel by 1055 GMT, off Monday's 10-week low of $60.35. London Brent crude was up 72 cents at $59.50 a barrel. Prices may have fallen a long way from late August's $70.85 record high, but they are still at levels unseen in real terms in a quarter of a century and are up 42 percent since January 1. The world's oil producers have been pumping flat out to supply refiners that are running at full tilt to produce fuel, gasoline and heating oil for the United States, India and China.

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