LONDON, Aug 14: Global oil prices rose on Tuesday after crude producers' cartel Opec upgraded its estimate for 2007 world oil demand growth, despite the current turmoil gripping world financial markets.

The price of London's Brent North Sea crude for September delivery added 20 cents to $70.43 per barrel.

New York's main futures contract, light sweet crude for delivery in September, gained 42 cents to reach $72.04 per barrel.

The Organisation of Petroleum Exporting Countries said in a monthly report that world oil demand growth in 2007 was forecast at 1.3 million barrels per day (bpd), or 1.5 per cent.

That was “slightly higher” than the estimate given last month and reflected “additional oil needs for Japanese power plants,” the Opec report said.

Opec noted that “over the last four weeks, prices for (New York) crude oil have exhibited extreme volatility,” as the world economy has experienced stock market and other economic fluctuations.“There is no doubt that the above uncertainties have clouded the outlook for oil demand,” Opec said.

It added that US economic problems such as the “recession in the housing sector, in particular the sub-prime mortgage market” have precipitated “fears of a global economic slowdown.” Last week, oil prices plunged by more than 7 per cent in London, and by almost 6 per cent in New York as traders feared that global energy demand may weaken.

Recent intervention by the US Federal Reserve and other central banks, pouring tens of billions of dollars into financial markets to ease tightening credit, has appeared in part to soothe jittery investors.

“Overall strong fundamentals conditions (of strong global demand and tight supplies) are keeping prices ... underpinned above the $70 mark,” said analysts at Barclays Capital.

They added that “broader financial developments continue to take central stage in setting short-term price direction.” Elsewhere on Tuesday, traders kept a keen eye on weather in the US Gulf of Mexico, where many US energy installations are based.

“In addition to an already formed tropical depression in the far eastern Atlantic, there are warnings from the US National Hurricane Centre that another depression could form in the (US) Gulf of Mexico,” Sucden analyst Michael Davies said.

The US government's Climate Prediction Centre predicted last week that a total of 13 to 16 tropical storms were expected to form in the Atlantic basin this year. —AFP