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Oil prices rose today as OPEC raised its 2014 global oil demand growth forecast for a second consecutive month.

Brent crude was up by 21 cents to hit $108.23 a barrel, while US oil rose by nine cents to settle at $98.08 a barrel, reported Reuters.

Crude prices increased after the Organisation of the Petroleum Exporting Countries (OPEC) said in its monthly report that global demand is estimated to rise by 1.14 million barrels per day in 2014, up 50,000bpd from its previous forecast, as economic growth picks up in Europe and the US.

OPEC said that US oil consumption showed a significant increase in December, and although preliminary weekly data for January and February showed mixed signals, demand growth stayed healthy in January.

"Crude drew support from China’s National Bureau of Statistics data, which revealed that January and February’s industrial output rose 8.6% from a year earlier."

Oil prices received more support from the unfolding geo-political situation in Ukraine, as the European Union decided on a framework to impose its first sanctions on Russia since the Cold War.

Crude drew support from China’s National Bureau of Statistics data, which revealed that January and February’s industrial output rose 8.6% from a year earlier.

But further crude gains were capped by the Energy Information Administration (EIA) data, which showed that US stockpiles of crude rose 6.2 million barrels last week, in the biggest weekly increase since the week ending 24 January.

Inventories partly surged with refinery utilisation rates dropping 1.4% to 86% capacity, as units shut for spring maintenance.


Image: OPEC said that world oil demand will increase more than expected in 2014. Photo: courtesy of Renjith Krishnan.

Energy