Crude rose on Monday for a fourth day as Venezuela's dispute with Exxon Mobil Corp. and comments from an Iranian OPEC official increased concern of a shortage of oil supplies in the United States.
The conflict between Venezuela's state owned company PDVSA and Exxon Mobil could reduce exports from the South American country to the U.S. Venezuela is the number four provider of crude to the United States.
Comments from President Hugo Chavez on a television program yesterday raised worries about supplies. He said that Venezuela does not have plans to stop sending oil to the United States. However, he added the country could cut off exports to the U.S. if Washington attacks or tries to harm the South American country.
The same day President Chavez said Venezuela could sue Exxon Mobil Corp. for not paying oil taxes.
Venezuela has cut off petroleum shipments to Exxon Mobil since last week as a result of the American company's legal effort to freeze $12 billion of Venezuela's assets.
After Exxon won the resolution in an international court, the company's Chairman Robert Olsen said the company is prepared to talk to Caracas about an agreement, according to Reuters.
Crude oil climbed 0.46 cents or 0.48 percent to $95.96 a barrel on the New York Mercantile Exchange in electronic trade at 2:22 p.m. Brent crude traded in London's ICE Futures Exchange rose 0.15 cents or 0.16 percent to $95.11 a barrel. Oil rose as high as $100.09 a barrel at the beginning of the year.
Comments from Iran's OPEC minister Gholam Hossein Nozari also supported today's gains.
It is normal for OPEC to cut its production in March every year, he said.
His statement referred to lower output in response to the weak oil demand that follows the end of the winter season in the northern hemisphere. The Organization of Petroleum Exporting Countries will hold a meeting on March 5 to decide on world supplies.
Oil consuming countries want OPEC to increase oil output in March to reinforce crude's price. On the other hand, countries such as Venezuela and Iran who belong to the Organization of Petroleum Exporting Countries are willing to lower demand.
Moreover, due to the fears of an economic recession in the U.S., OPEC, which provides near 40 percent of world's crude output, reduced its world oil demand forecast last Friday.
In 2008, world oil demand is forecast to grow by 1.2 million b/d to average just under 87 mb/d, representing a slight downward revision from the previous estimate. OPEC's press release stated.
Likewise, the prediction for 2008 demand from the International Energy Agency is growth of 1.67 million of barrels per day, which stands below OPEC's forecast.