BEIJING, Jan. 17 -- Crude oil prices may rise for a third week amid concern that OPEC production will be reduced and Iraqi supplies disrupted, according to a Bloomberg survey.

    Thirty-five of 71 respondents, or 49 per cent, said oil prices will rise this week. Twenty-two said prices will be little changed and 14 forecast a decline. Over a week ago, 42 per cent of respondents said prices would fall and 24 per cent forecast a gain. Eleven of the last 15 surveys correctly predicted the market's direction.

    Iraqi Prime Minister Ayad Allawi said last week that parts of the country will be too dangerous for voting in the January 30 election. The Organization of Petroleum Exporting Countries is meeting in Vienna, also on January 30, to review output. Crude oil in New York touched US$48.65 a barrel, a six-week high.

    "Prices may hit US$50 on the possible cutback of OPEC production and heightened geopolitical risks in the face of the election in Iraq," said Kazuhiro Saito, an oil trader at Interes Capital Management Co in Tokyo.

    Crude oil for February delivery rose US$2.95, or 6.5 per cent, to US$48.38 a barrel on the New York Mercantile Exchange last week. Prices have declined 13 per cent since reaching US$55.67 a barrel on October 25, the highest since futures began trading in New York in 1983.

    OPEC is scheduled to load 2.1 per cent less oil on tankers during the four weeks ending January 29 compared with the four prior weeks, according to a report yesterday by Oil Movements, a consulting firm based in Halifax, UK. Members are scheduled to load 23.8 million barrels a day in the period, down 530,000 barrels a day from the four weeks ended January 1.

    OPEC, which pumps a third of the world's oil, agreed on December 10 to cut output by 1 million barrels a day beginning January 1. The group's 11 members reduced production by 0.7 per cent to 29.78 million barrels last month, a Bloomberg survey showed.

    "I expect prices to rise," said Peter Beutel, president of Cameron Hanover Inc, a New Canaan, Connecticut-based energy consultant. "The recent volatility is a condition of funds turning over positions with a faster, sharper velocity. That won't change until February," after the OPEC meeting and Iraqi elections.

    Hedge fund managers and other large speculators helped push prices higher last week as they purchased futures on expectation of a rally, traders and analysts said. The intraday movement of oil futures in New York covered as much as US$2.30 in a single day last week.

    Some respondents said the arrival of colder-than-normal weather in the eastern US will boost demand for heating oil and bolster crude-oil prices. Temperatures will be below normal in the Northeast, where 80 per cent of US home heating-oil use occurs, from January 19 through January 23, according to a National Weather Service report released yesterday.

    "I expect the price to rise next week on weather and Iraq- watching," said Kurt Barrow, an energy consultant at Purvin & Gertz Inc in Singapore. "It appears that colder weather is headed for the Northeast next week, breaking from the past weeks of warmer days. Whether Iraq exports are affected or not, all eyes will be on Iraq as we approach the election."

    Heating oil for January delivery rose 7.76 US cents, or 6.1 per cent, to US$1.3509 a gallon in New York last week.

    Heating-oil inventories along the East Coast fell 3.4 per cent to 29.7 million barrels two weeks ago, leaving stockpiles 16 per cent lower than a year ago, according to an Energy Department report released January 12. Crude-oil inventories dropped 3 million barrels to 288.8 million, the lowest since the week ended October 22, the report showed.

    "I think we will see further inventory draws and that will cause the market to continue its rally, targeting US$50 again," said Carl Larry, an associate director of energy futures at Barclays Capital Inc in New York. "The short week and odd Department of Energy release time will also add to the upside risk."

    (Source: China Daily)