Oil rallies after Opec sees greater demand

(MENAFN- The Peninsula) Oil rose for a third straight trading session yesterday as Opec forecast greater demand for crude this year than previously thought and projected less supply from countries outside the group.

The Organisation of the Petroleum Exporting Countries forecast demand for its oil will average 29.21 million barrels per day (bpd) in 2015, up 430,000 bpd from its previous forecast, while slashing its outlook for crude supply growth in non-Opec countries.

Data last week showing the US oil rig count at a three-year low also bolstered prices, which were attempting to find a floor after a brutal selloff in crude that wiped out over half of the market's value since June. Benchmark Brent oil was up $1.20, or 2 percent, to $59 a barrel by 1900 GMT, after a hitting a session high of $59.61.

US crude futures rose $1.75 to $53.44 a barrel, having risen $2.30 earlier to an intraday peak of $53.99. Both US crude and Brent have gained nearly 20 percent since a January 29 rebound inspired by better confidence in the crude supply outlook following a seven-month-long selloff that halved prices. Some traders were pessimistic though that the rally will last.

"It was mainly hedge fund, speculator driven and smacks of price-overshooting," said Anuraag Shah, portfolio manager at the Los Angeles-based Tusker Investment Fund, which manages nearly $100m across commodities.