Oil prices rose once again over $47 a barrel on Friday, on the IEA’s report on a tighter market for 2005.

March crude oil rose $0.02 to $47.12 a barrel.

International Energy Agency released its forecasts on global supply and demand damping optimism for a possibility of a rise in oil supply in 2005. The agency now envisages a tighter market due to the slower rise in oil supply from the non-OPEC oil producers. Russia in particular will show disappointing growth, and oil demand has been expanding at an incremental rate. Last year it added 34%.

"A material cut in January OPEC production and disappointing growth from non-OPEC producers have thrown cold water on many of the market’s concerns about near-term oversupply," Merrill Lynch said in a report.
Private weather forecaster EarthSat reported on Thursday a possible drop in US temperatures during March. This forecast contrasts with the predictions of the National Weather Service that expects the winter to end with above-normal temperatures.

Saudi Arabia promised to keep the output unchanged, alleviating fears that the OPEC might cut production ahead of a seasonal drop in demand.

The OPEC agreed in its Vienna meeting on January 30 to keep out put quotas 10% above last year’s levels at 27 million barrels a day for all members except Iraq. Now the cartel is watching out for drops in demand in order to cut supplies if necessary.