Oil Gains as Venezuela Says No Need for More OPEC Production

Crude oil rose more than $1 a barrel after Venezuela's oil minister said OPEC shouldn't increase production at its next meeting in December.

Prices are set by the market and ``OPEC can't do anything about the price,'' Rafael Ramirez told reporters before an OPEC heads of state summit in Riyadh this weekend. Oil fell yesterday after a government report showed U.S. inventories climbed for the first week in four. New York prices reached an intraday record of $98.62 on Nov. 7.

``A year ago if OPEC went into a meeting with prices at a record they'd let their arms be twisted'' into raising supplies, said Helen Henton, head of commodity research at London-based Standard Chartered Plc. ``Now they're looking for very real evidence countries can't cope with $90 oil.''

Crude oil for December delivery added as much as $1.12, or 1.2 percent, to $94.55 a barrel on the New York Mercantile Exchange. The contract traded at $94.25 a barrel at 1:28 p.m. London time.

Brent crude oil for January settlement rose as $1.02, or 1.1. percent to $91.25 on the London-based ICE Futures Europe exchange. The contract traded at $91.12 a barrel at 1:14 a.m. local time. Brent for December settlement fell 42 cents to $90.94 a barrel yesterday, when the contract expired.

OPEC is ``tapped to the max, producing just about every drop of oil they can produce,'' said Christopher Edmonds, an analyst at FIG Partners Energy Research & Capital Group, in Atlanta. ``It's going to be very hard for them to turn the taps on any further. One-hundred dollar oil isn't out of the question.''

Price Forecast

The Organization of Petroleum Exporting Countries, which scheduled a 500,000 barrel-a-day output increase from Nov. 1, will raise shipments 1.4 percent this month, the consulting company Oil Movements projected in a report yesterday.

``The market's pretty tense, we need that oil,'' Francisco Blanch, head of global commodity research at Merrill Lynch & Co. in London, said in a telephone interview. ``There's a risk of an upside spike in prices.''

Deutsche Bank AG raised its forecast for the average price of Brent crude oil in 2008 to $80 a barrel from $62 a barrel previously.

The increase reflects current near-record oil prices and ``tightness'' in global supply and demand, Deutsche Bank analysts wrote in a report today.

Oil in New York is poised for a 1.9 percent drop over the past five days, the first weekly decline in six, after the International Energy Agency trimmed demand forecasts for 2008 because of the impact of record prices.

Stockpiles Gain

U.S. crude-oil stockpiles climbed 2.81 million barrels to 314.7 million last week, an Energy Department report showed. A 750,000 barrel decline was expected, according to the median of 17 responses in a Bloomberg News survey. Imports rose to the highest since the week ended Aug. 17.

``There's quite a lot of oil supply around,'' said Standard Chartered's Henton. ``We see prices coming down from this point once people realize demand is slowing.''

Total implied fuel demand in the U.S. averaged 20.6 million barrels a day the past four weeks, 0.7 percent less from a year earlier, the Energy Department said yesterday.