* Renewed confidence in economic recovery lifts oil
* Saudi oil min expects stronger global oil demand
* Brent at highest premium to U.S. crude since Feb 2009
(Updates prices, adds analyst quotes from para 4)
By Alex Lawler
LONDON, Jan 24 (Reuters) - Brent crude oil held near $98 a
barrel on Monday on renewed confidence that developed economies
are recovering and as Saudi Arabia's oil minister predicted
strong oil demand in 2011.
Saudi Arabia's Oil Minister Ali al-Naimi said he expected
global oil demand to rise between 1.5 million and 1.8 million
barrels per day (bpd) this year -- more than forecast by the
International Energy Agency. [] []
Brent crude for March <LCOc1> rose 27 cents to $97.87 a
barrel by 1203 GMT. It reached $99.20 on Jan. 14, the highest
since October 2008. U.S. crude for March <CLc1> lost 71 cents to
$88.40.
"Market sentiment is still positive, economic optimism has
gathered the upper hand and as long as this is the case, prices
should move up further," said Carsten Fritsch, analyst at
Commerzbank in Frankfurt.
Euro zone industrial new orders rose more than expected in
November, data showed on Monday, confirming the strength of euro
zone recovery in industry but pointing to weakness in demand for
consumer goods. []
Saudi Arabia is by far the largest oil producer in the
Organization of the Petroleum Exporting Countries and holder of
the bulk of the world's unused oil production capacity.
Speaking at an industry conference, Naimi said he was
worried about the impact of speculation on prices.
"I expect prices to continue to be stable at last year's
rates (levels)," he said.
"The only thing that I'm concerned about is the pressure
exerted by speculators, analysts and some investors in the
futures market on prices to push them up or down away from
market fundamentals."
BRENT PREMIUM
Naimi declined to say whether Saudi Arabia's production was
in line with its OPEC target of 8.05 million bpd.
The IEA said in a report last week that the OPEC leader was
making more crude available to the market. []
Naimi said Saudi Arabia was set to hold about 4 million bpd
of spare crude oil capacity in 2011. The kingdom has capacity of
12 million bpd, or 12.5 million bpd including the neutral zone.
Brent's premium to U.S. crude, also known as West Texas
Intermediate or WTI, <CL-LCO1=R> reached $9.57 on Monday, its
highest since February 2009, on tight North Sea supplies and
strong emerging market demand.
"There are bearish factors on the WTI side and bullish
factors on the Brent side," said Mike Wittner, analyst at
Societe Generale. "Put the two together and you have the basis
for a wide spread."
Royal Dutch Shell <RDSa.L> said on Friday four North Sea
Brent oil and gas platforms, which shut down on Jan. 15, were
expected to remain closed for several weeks. []
Near-record crude inventories at Cushing, Oklahoma, the
delivery point for U.S. crude futures contracts, depressed
nearby U.S. futures and widened the gap against Brent.
(Reporting by Florence Tan and Alex Lawler; editing by William
Hardy)
