The price of oil inched further above $97 a barrel Tuesday, adding to a sharp rise the day before, as OPEC upgraded its forecast for global demand this year.
By early afternoon in Europe, benchmark oil for March delivery was up 28 cents to $97.31 in electronic trading on the New York Mercantile Exchange. The contract on Monday gained $1.31 to finish at $97.03 a barrel on the Nymex as the euro strengthened against the dollar.
OPEC, the Vienna-based organization comprising many of the world's key oil exporters, raised its 2013 forecast for global demand to 89.7 million barrels — 80,000 barrels more than its previous forecast a month ago — citing "some signs of recovery in the global economy and colder weather at the start of this year."
It said about half of the demand increase over 2012 would come from China.
Oil prices were also supported by a rise in the euro against the dollar. The increase makes it cheaper for European traders to buy crude oil, which is priced in dollars. On Tuesday, the euro was up to $1.3443 from $1.3398 late Monday in New York.
Meanwhile, investors kept an eye on North Korea, which ran its third nuclear test since 2006, an underground explosion which set off powerful seismic waves.
"While North Korea is a negligible oil consumer, the move nevertheless could be seen as contributing to geopolitical instability in the world's pre-eminent demand growth region," said a report from JBC Energy in Vienna.
Continue reading this story on the...