November 16, 2003	Sunday	Ramazan 20, 1424

NEW YORK, Nov 15: Oil prices rose on Friday, pushing gains this month to 12 per cent after the US government reported crude and heating oil stocks falling ahead of winter demand.

US light crude for December delivery settled 47 cents higher at $32.37 a barrel. Benchmark January Brent crude rose 26 cents at $29.56 a barrel in London, the highest price for nearly a month.

Suicide bombs in the Middle East have bolstered prices. Last weekend, suspected al Qaeda militants in Saudi Arabia killed at least 18 people, and this week in Iraq, a blast killed 16 Italian soldiers, the worst violence on that country’s troops since World War II.

Refined oil product stocks are below comfortable levels in the United States, the world’s biggest oil consumer, ahead of colder northern hemisphere temperatures.

Traders are quite nervous about what’s happening in the Middle East and if you see weekly data that looks bullish you’d expect that to add short-term impetus to prices, said Geoff Pyne, consultant to Sempra Energy.

The US Energy Information Administration (EIA) said on Thursday that crude stocks fell 800,000 barrels last week, while distillate stocks, including heating oil, fell 1.5 million barrels.

Traders are concerned that any tightening of supply or unusually cold weather would come on top of a thin inventory cushion.

Oil prices have risen around 15 per cent since a deal in September by the Organization of the Petroleum Exporting Countries (Opec) to cut production by 3.5 per cent in November.

However, shipping brokers say heavy tanker loadings from the Middle East suggest Opec has not implemented the cutback in full.

Opec could further slash supply at a meeting on December 4, which analysts say it needs to do by the first quarter 2004 to stop rising output from Russia and Iraq from eroding oil’s 4-year price boom.

US crude imports hit record levels in October. This has helped crude oil inventories slowly increase to around 290 million barrels, the EIA said in a weekly report.

It added that the Opec cut means it is unclear how long crude oil imports can continue to average around 10 million barrels per day, especially with China’s economy growing sharply, boosting its crude imports accordingly.

Bullish sentiment has also been backed up by increased global oil demand growth, which has been driven by strong buying from China, according to a report on Thursday by the International Energy Agency (IEA).

It revised a forecast for global demand in 2003 to 1.28 million bpd, up 1.7 per cent from 2002.—Reuters