(Corrects oil's high in second paragraph to $87.63 from
$87.67)
* IEA: oil to exceed $100 in 2015
* Oil joins rally across commodities
* Coming Up: U.S. API oil inventories; 2130 GMT
(Update prices, adds quotes)
By Ikuko Kurahone
LONDON, Nov 9 (Reuters) - Oil resumed gains to hit a fresh
two-year high above $87 on Tuesday, erasing earlier losses, as
commodities rallied across the board.
U.S. crude oil futures <CLc1> hit $87.63 a barrel, the
highest since October 2008, and they were trading 31 cents
higher at $87.37 by 1341 GMT.
ICE Brent <LCOc1> was trading 31 cents higher at $88.77.
Oil reversed course following the release of the IEA's
long-term energy outlook, in which the Paris-based agency said
in its annual world energy outlook that oil prices might exceed
$100 a barrel in 2015 and $200 in 2035. [] []
"We believe the age of cheap oil is over. Both on the demand
side and the supply side, in order to find market equilibrium we
may need higher prices in the future," the IEA's chief economist
Fatih Birol said at a news conference to present the outlook.
Analysts said the $100 mark provided a clear price target
for investors, but return on investments might not be dramatic.
"That $100 per barrel is four-five years away. It is not
much support to oil prices," Olivier Jakob with Petromatrix
said.
Analysts also said gains might be limited by a stronger
dollar against the euro due to renewed concern about debt in
Europe and an expected rise in U.S. oil inventories.
"The top end of prices will be weighed by renewed concerns
over sovereign debts in Europe, while crude prices would move
with a solid floor due to money inflows into risky assets
following the further easing (in the United States)," analysts
with Mizuho Corporate Bank in Tokyo said in a research note.
"Ahead of the (U.S. government) oil inventory data tomorrow
narrow range price movements are likely today."
Wider commodities markets rallied due to risk appetite on
the back of the U.S. Federal Reserve's decision last week to
inject $600 billion to spur a flagging recovery, referred as the
QE2.
Gold added to a record-breaking run, hitting a new high
above $1,400 an ounce as investors sought safe havens in the
face of uncertainties including euro zone debt worries and this
week's G20 leadership summit in Seoul. []
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INVENTORIES
U.S. crude inventories probably increased by 1.4 million
barrels in the week to Nov. 5 as imports rebounded, a Reuters
poll of analysts showed on Monday. []
The American Petroleum Institute will issue its oil stocks
report on Tuesday at 2130 GMT, followed by the U.S. Energy
Information Administration's (EIA) government data on Wednesday.
[]
The analysts in the poll forecast a drawdown of 1.8 million
barrels for middle distillate inventories, which includes
heating oil and diesel, down for the seventh consecutive week,
while gasoline stocks fell 1 million barrels.
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For a PDF of Reuters reports on this and related topics, click:
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The U.S. EIA will release its outlook for 2011 oil
consumption in the United States and the world later on Tuesday.
Analysts expected the EIA to increase its forecast for next
year.
(Reporting by Alejandro Barbajosa in Singapore, Zaida Espana
and Ikuko Kurahone in London; Editing by Alison Birrane)
