Oil inches to near $73 as traders eye OPEC, demand

SINGAPORE: Oil prices inched to near $73 a barrel Friday in Asia amid expectations OPEC plans to leave production levels unchanged at its meeting next week.

Benchmark crude for January delivery was up 16 cents to $72.81 at midday Singapore time in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract fell one cent to settle at $72.65

Investors will be watching closely the output policy decided at the Organization of Petroleum Exporting Countries' meeting Tuesday in Luanda, Angola. Leaders of the 12-member cartel have said they would like the price of oil above $70 a barrel and so far signaled they plan to keep production unchanged.

Traders are also looking for evidence demand for crude and its products is improving. Energy Department data released earlier this week showed US demand for distillates such as heating oil and diesel were at its highest since March due to colder weather and a growing economy, Barclays Capital said.

"Distillate demand showed the first signs of inspiration," Barclays Capital said in a report. "Cold weather should compliment the advent of greater trucking activity, thereby providing a boost to demand."

In other Nymex trading in January contracts, heating oil was steady at $1.96 while gasoline rose 0.64 cent to $1.86. Natural gas rose 4.9 cents to $5.82 per 1,000 cubic feet.

In London, Brent crude for February delivery fell 1 cent to $73.36 on the ICE Futures exchange.