OPEC agreed at the weekend to keep oil output steady. (Photo: Reuters)
Oil prices were higher on Monday after the Organization of the Petroleum Exporting Countries agreed at the weekend to keep crude oil output levels flat.
Several reports, including one from the International Energy Agency raising its 2011 oil demand growth forecast, indicated that fundamentals are strong, analysts said.
"It looks like fundamentals are getting stronger heading into winter," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
The International Energy Agency lifted its 2011 oil demand growth forecast by 130,000 bpd to 1.32 million bpd from its previous monthly report.
On Friday, U.S. data showed consumer sentiment rose more than expected in early December to the highest level in six months, according to the Thomson Reuters/University of Michigan survey, while the government said the country's trade deficit shrank much more than expected in October.
Severe winter weather in the United States and Europe is also seen boosting energy demand.
Europe is expected to have colder than normal temperatures with energy demand above normal, according to DTN Meteorlogix, and a strong blizzard has dumped large amounts of snow in the U.S. Midwest.
Fears that China would increase interest rates due to rising inflation have so far failed to materialize, but traders said they were still closely watching for any policy moves that would dampen demand in the world's number one energy consumer.
China's implied oil demand in November rose 13.7 per cent from a year earlier to a record of nearly 9.3 million barrels per day, Reuters calculations based on preliminary official data showed on Monday.