* Renewed confidence in economic recovery lifts oil
* Saudi oil min expects stronger global oil demand
* Goldman sees "structural bull market" returning
* 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 41 cents to $98.01 a
barrel by 1354 GMT. It reached $99.20 on Jan. 14, the highest
since October 2008. U.S. crude for March <CLc1> lost 37 cents to
$88.74.
"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. []
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."
High inventories at Cushing, Oklahoma, the delivery point
for U.S. futures contracts, have depressed U.S. crude, while
North Sea production glitches have helped to bolster Brent.
[]
GOLDMAN SEES BULL MARKET
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 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.
Oil is still a long way from the record high of $147 a
barrel it reached in 2008 and while analysts do not expect that
to be revisited any time soon, some prominent voices see the
rally running further.
Goldman Sachs said it believed a "structural bull market"
would return to the oil market as OPEC used more of its idle
capacity to meet demand.
"As OPEC spare capacity is drawn down, we expect a
structural bull market to return to the oil market, with
substantially higher prices," Goldman said in a report on
Monday.
(Additional reporting by Florence Tan; editing by William Hardy
and James Jukwey)
