December 20, 2007	Thursday	Zilhaj 9, 1428

LONDON, Dec 19: Oil prices rose on Wednesday as the US government reported a much larger than expected drop in crude inventories last week.

London’s Brent North Sea crude for February delivery gained 80 cents to $90.92 per barrel.

New York’s main contract, light sweet crude for February, climbed by 74 cents to $90.66 per barrel. The January contract expired Tuesday at $90.49.

The US Department of Energy said stockpiles of US crude tumbled by 7.6 million barrels in the week ended December 14. Analysts had forecast a drop of only 1.5 million barrels.

“It was a bullish report,” said Cameron Hanover analyst Peter Beutel, in reference to its support for prices.

This week, the oil market was pressured as traders fretted over the outlook for the US economy -- amid fears that a potential economic slowdown could dampen global energy demand.

Prices sank on Tuesday, reversing an earlier spike, as the market reacted to a move by Turkish troops into northern Iraq to flush out Kurdish rebels -- and their subsequent withdrawal hours later.

“We feel Tuesday’s rally was just the latest example of an opportunity for a stronger rally that has failed to develop. Over time, these recurring failures ... have to be wearing on market sentiment,” said Citigroup analyst Tim Evans.

Prices were also pressured on Tuesday by a strike at five French refineries owned by oil and gas giant Total.

Oil prices had surged to a record high of $99.29 a barrel on November 21, which led to widespread calls for Opec to hike output at its meeting in Abu Dhabi earlier this month.

However, Opec decided against increasing production, as it insisted that the market was well supplied.

On Monday, Algerian Energy Minister Chakib Khelil has said he does not rule out a boost in the cartel’s oil output at its next meeting in February.—AFP