Oil prices rose today on investor optimism after a big interest rate cut in Australia and the US Federal Reserve's announcement that it would begin buying commercial paper.
US crude rose $2.07 to $89.88 a barrel, after hitting an eight-month low on Monday as part of a four-day decline. London Brent gained $1.14 to $84.82 a barrel.
Prices had nosedived under $90 a barrel yesterday, hitting eight-month low points, as deepening global financial turmoil and plunging stock markets raised fears about slowing demand for energy.
And the US Energy Information Administration today said the 'deteriorating' global economy will cut into world oil demand growth next year by 140,000 barrels per day.
Global oil consumption is forecast to average 86.92 million bpd in 2009, about 780,000 bpd more than this year's demand but 140,000 bpd less than the agency had forecast just last month.
World oil use is projected to rise by only 330,000 bpd this year, about 340,000 bpd lower than the agency’s projections last month.
'Intermediate crude oil prices are projected to average about $112 per barrel in both 2008 and 2009,' the USEIA said.
Oil markets are expected to remain tight over the next six months, which will push WTI oil prices to $120 a barrel by next April, before declining to $106 by the end of next year, the agency added.
