Crude rises following demand prediction

10 October 2007

Crude oil prices rose sharply on Tuesday after the US government predicted an imminent increase in demand.

A report by the Energy Information Administration (EIA) suggested that oil consumption would continue to grow in China, Brazil, the US and the Middle East in the coming months.

That led it to forecast that global oil consumption will be 1.8 million barrels per day higher in the fourth quarter of 2007 than in the same period in 2006 and that it will increase by 1.4 million barrels per day in 2008.

Following the publication of the report, US crude gained $1.24 to close at $80.26 (£39.31) a barrel, while London Brent crude rose by 91 cents to reach $77.49.

Meanwhile, Qatar's energy minister Abdullah ibn Hamad Al-Attiyah has suggested that the price of crude oil is too low, despite it being close to its record high.

He told Al-Jazeera: "If we take into account inflation from 1972 to the present day, the real and fair price for oil should be more than $100."