Oil prices rose on strength in petrol. Petrol traditionally takes the energy market spotlight in springtime, as suppliers prepare for the US summer driving season. However, this rise was marginal, on assuarances from top exporter Saudi Arabia that it has no plans to reduce supply despite rising US crude inventories. US crude rose to US$48.95 a barrel, rebounding from Monday's 3 month low of US$47.60, while London Brent crude was up at US$49.39 a barrel.
Currently, oil prices are down by almost US$10 from April's record high of US$58.28 a barrel. This price decline can be attributed to Organisation of Petroleum Exporting Countries (OPEC) boosting production to 25 year highs, triggering a rise in US crude stocks to their highest level since July 1999. Saudi Arabia has no plans to reduce its oil production, indicating a further rise for the fourth quarter. Prices were also pressured by expectations that a US government inventory report due on Wednesday would show an increase of nearly 1 million barrels. Opec has also reduced its forecast for world oil demand growth this year, expecting growth of 1.82 million bpd to a total 83.94 million bpd, cutting 80,000 bpd from its previous forecast. A firmer US dollar, which has hit 7 month highs against the euro -- has also pressured oil prices.
18-May-05 
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