Crude prices rose on Tuesday for the fifth straight trading session although the Organization of Petroleum Producing Countries (OPEC) has cut its forecasts for crude oil demand in 2011 and 2012.
In its latest oil market report, OPEC said the crude oil demand was declining because of a weakening world economy. OPEC lowered its forecasts for oil demand in 2011 by 180,000 barrels per day, and 100,000 barrels per day for 2012, citing falling consumption in advanced countries and rising demand from developing countries in Asia.
Despite the cut in demand expectation, the rise in crude was mainly lifted by hopes for a new plan to deal with the European debt problems. After France and Germany agreed on a new plan to help Greece and recapitalize the region's banks, the market sentiment was boosted.
Following a big rally of about 2 percent on the previous trading day, the euro rose further against the dollar, helping push up the oil prices.
Eurozone member country Slovakia is voting on expanding the powers of the European rescue fund, which caught market attention since its decision mattered greatly after all the other 16 countries have passed it.
Light, sweet crude for November delivery rose 40 cents, or 0.47 percent to settle at 85.81 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for November delivery climbed 1.40 dollars, or 1.31 percent to close at 108.05 dollars a barrel.