SINGAPORE – Oil prices rose in Asian trade Tuesday, boosted by a weaker dollar but further gains were capped as OPEC forecasts of lower global energy demand dampened sentiment, analysts said.
New York’s main contract, light sweet crude for delivery in October, was up 81 cents at $89 per barrel in afternoon trade.
Brent North Sea crude for October delivery gained 61 cents to $112.86.
“We see that crude oil is gaining alongside a weaker dollar,” said Ker Chung Yang, a commodity analyst at Phillip Futures in Singapore.
A weaker greenback makes dollar-priced crude cheaper to holders of other currencies, perking up demand and boosting prices.
Ker said however that a report by the Organisation of Petroleum Exporting Countries forecasting lower global demand this year and in 2012 was limiting gains.
“This is bearish news for the oil markets,” Ker said.
OPEC, citing the poor economic climate, said demand for this year was forecast to be 87.99 million barrels per day (bpd), down from a previous estimate of 88.14 million bpd.
For 2012, demand was expected to average 89.26 million bpd, down from the August estimate of 89.44 million bpd.
The 12-member oil cartel cited weak demand in the United States and the effects of financial strains, particularly among the developed nations, which were dragging down demand in China and India.
Oil traders were also monitoring data from the American Petroleum Institute due later Tuesday. Analysts are predicting inventories will decline by three million barrels due to supply disruption caused by tropical storm Lee.
“Currently, there is uncertainty with the eurozone debt crisis and price fluctuations may be less drastic with muted actions expected,” Ker said.