Last Updated : 12 March 2010 at 09:55 IST

Oil edges up in Asia on demand increase

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SINGAPORE (Commodity Online) : Global oil prices edged up slightly in Asian trade Friday mainly on increase in energy demand amid signs of global economic recovery.

Light sweet crude for April delivery was seen trading at $82.22 a barrel at 11.30 a.m Singapore time while Brent crude was at $80.39 a barrel at the same time.

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Analysts said the black gold is poised for a second consecutive weekly increase despite any efforts by China to tighten monetary policy further on rising inflation.

US Department of Energy's weekly oil inventory report on Wednesday showed a surprise drop in petrol stockpiles, a key factor behind the large supply backlog, indicating strengthening demand.

Petrol stockpiles tumbled 2.9 million barrels in the week to March 5, surprising the market as most analysts had expected an increase of about 100,000 barrels.

The DoE also said distillates were down 2.2 million barrels, far more than predictions of a 700,000-barrel drop.

US crude oil inventories meanwhile climbed 1.4 million barrels, which undershot analysts' consensus forecast for a 1.7-million-barrel gain.

The market is waiting for the results of a meeting of the Organisation of the Petroleum Exporting Countries (OPEC) next Wednesday, analysts said.

On Thursday, April delivery rose 2 cents to settle at $82.11 a barrel on the New York Mercantile Exchange while In London, Brent crude lost 20 cents to settle at $80.28 on the ICE futures exchange.

Earlier, prices slid as low as $81.33 after the Labor Department said workers filing for jobless benefits for the first time fell slightly less than expected.

There was also news that China's inflation rate jumped to 2.7 percent in February from 1.5 percent in January.

Crude oil prices briefly reached an eight-week high of $83.03 on Wednesday after OPEC predicted world oil demand would grow by 900,000 barrels per day this year but cautioned that its forecast depended on a sustained global economic rebound..