•Western crude futures were rangebound in early European trading Wednesday, consolidating the gains made Tuesday, sources said. This was despite OPEC's decision to raise output by 500,000 b/d and the International Energy Agency's latest report, which showed a downward revision in its world crude oil demand projections for the fourth quarter and 2008, market sources said Wednesday. "We are totally confused about why it rallied. I think it is the funds being bullish", said a London-based broker. "There are no storms, no aggravation, gasoline demand was the lowest in three weeks and the IEA has forecast demand lower. There is no reason for the market to be here. We are 30-40 cents below all-time highs [on NYMEX WTI]," the broker added.

•In its latest monthly report, the IEA cut its estimate for demand in the fourth quarter by 250,000 b/d to 87.8 million b/d, which is still 2.8% or 2.3 million b/d higher than the year-ago quarter. The IEA also cut its overall demand estimate for 2007 and 2008 by 90,000 b/d and 160,000 b/d respectively, reflecting growth rates of 1.7% this year and 2.4% in 2008, according to Platts data.

Updated: September 12, 2007