Oil rises above $83

Oil prices rose above $83 a barrel on Wednesday as the dollar slumped amid reinforced expectations of more monetary easing by the US central bank and on news that China's crude imports jumped in September. The US dollar fell against most currencies, a day after minutes from the Federal Reserve's September meeting reinforced expectations for more monetary easing in the United States.
-- Oil demand growth to accelerate for the rest of 2010: IEA
Oil brokers and analysts said the euro's failure early on Wednesday to hold above $1.40 had limited losses by the dollar and gains by oil. US crude for November delivery rose $1.34, or 1.64 percent, to settle at $83.01 per barrel, having traded from $81.68 to $83.45. In London, ICE Brent November crude rose $1.14, or 1.37 percent, to settle at $84.64 a barrel.
"It's mainly the dollar, which weakened on the expectation there will be quantitative easing," said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut. "The IEA raised its (2010) demand expectation a little and the Chinese imports number helped and the stock market is up."
"QE2 is influencing prices via the US dollar, on expectations that further easing will push the dollar lower and send oil rising," Commerzbank analyst Carsten Fritsch said. The International Energy Agency said China had overtaken the United States as the world's largest energy consumer.
The IEA on Wednesday said oil demand growth was expected to accelerate for the rest of 2010, but the agency revised lower its demand expectation for 2011. The US Energy Information Administration on Wednesday cut its 2011 oil demand growth forecast slightly, but also raised its 2010 forecast. The EIA also raised its 2010 non-Opec oil output growth expectation.
French unions extended a rail strike into a second day and blockaded oil refineries to protest pension reforms, but there were signs the stoppages could be losing steam as broad participation wavered. The IEA said France tapped emergency oil stocks as the country copes with a near halt in oil refining due to strikes at refineries and its top oil port.
Organisation of the Petroleum Exporting Countries oil ministers were set to meet in Vienna on Thursday for the first time in seven months. Opec has signalled it will keep output targets steady. But there have been calls for more target compliance and concern about the declining value of the dollar.
While the dollar's lower value helped push oil prices up, traders and analysts remain concerned about high US oil inventories and tepid demand. A Reuters analyst survey yielded a forecast for US crude inventories to have risen 1.1 million barrels last week.
Distillate stocks, including heating oil and diesel, were expected to have declined by 1.1 million barrels, with gasoline stockpiles declining 1.0 million barrels.
Industry group the American Petroleum Institute's weekly inventory report was set to arrive at 4:30 pm EDT (2030 GMT) on Wednesday, followed by government inventory and demand data from the US EIA on Thursday at 11 am EDT (1500 GMT). The reports were delayed a day because of Monday's US Columbus Day holiday.