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Oil rises near $92 as OPEC signals no output hike

Oil rises near $92 as OPEC signals no output hike

December 27th, 2010 by ALEX KENNEDY, Associated Press in News

SINGAPORE (AP) - Oil prices rose to near $92 a barrel Monday in Asia as some OPEC ministers signaled the group doesn't plan to boost output to cool the recent jump in crude.

Benchmark oil for February delivery rose 27 cents to $91.78 a barrel late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.

On Thursday, the contract rose $1.03 to settle at $91.51, the highest level since October 2008. Global oil markets were closed Friday for the Christmas holiday.

Arab members of the Organization of Petroleum Exporting Countries said at a meeting in Cairo over the weekend that the full group would likely not meet until June to discuss production quota policy. OPEC, which accounts for about 40 percent of global crude output, left quotas unchanged at a meeting earlier this month.

China raised its benchmark lending rate Saturday for a second time in two months in a bid to ease growing inflation pressures, a move that could undermine demand for oil.

"We would urge caution on behalf of the bulls," The Schork Group said in a report. "Consider China increasing its interest rates will likely have the effect of cutting down on lending and spending."

Some analysts are concerned that higher oil prices, which have jumped almost 30 percent since September, could fuel inflation and hurt global economic growth.

"High oil prices were one of the contributors to the last global crisis," JBC Energy said in a report. "The largest effect of an oil price shock on the economy occurs around three to four quarters after the price spike."

In other Nymex trading in January contracts, heating oil rose 0.9 cent to $2.55 a gallon, gasoline futures fell 0.14 cent to $2.44 a gallon and natural gas dropped 6.4 cents to $4.02 per 1,000 cubic feet.

In London, Brent crude rose 66 cents to $94.43 a barrel on the ICE Futures exchange.