Oil climbed toward $89 a barrel today after OPEC shrugged off calls from consumer nations for more supply by agreeing to keep output unchanged.
A slump in US crude stockpiles to the lowest level in more than two years added to gains, as did a production problem at a Canadian oil sands upgrader.
US crude gained 65 cents to reach $88.97 a barrel, down from a peak earlier in the day of $90.39. London Brent crude rose 29 cents to $89.82 a barrel.
The Organisation of Petroleum Exporting Countries, which controls more than a third of the world oil market, agreed at a meeting in Abu Dhabi to keep output unchanged, saying the market was already well-supplied.
'Our position is that demand and supply are balanced and there is no need to increase oil to the market,' said Iranian Oil Minister Gholamhossein Nozari.
US government data on oil inventories also fueled gains, revealing that crude supplies fell 8 million barrels in the week to November 30 to the lowest level since March 2005.
Analysts said the slump was due to delays in imports along the Gulf Coast after heavy fog hindered shipping. Additional support came after Canadian Oil Sands Trust said a fire at an upgrader in Alberta forced it to slow production of synthetic crude oil to 'minimum rates'.
Oil prices have risen about 40% since August, boosted by the weak dollar, concerns over falling oil inventories and speculative inflows. But prices have dropped back sharply from their peak $99.29 hit on November 21, pressured by concerns that top oil consumer the US could slide into recession.
