Oil prices up on new predictions from EIA

Oil prices were slightly higher on Tuesday after significant declines on Monday. The gains came after the Energy Information Administration, part of the US Department of Energy, raised its estimates of how much West Texas Intermediate crude will cost this year. Last month, the EIA said that a barrel of WTI would cost $60 on average in 2007. Now, the agency says that WTI will average $62 per barrel this year, and that 2008 spot prices will average $63.75 per barrel.

In addition, the EIA revised downward by 400,000 barrels per day how much it says that demand will grow in the second and third quarters of the year. However, the slower growth of demand was compensated by an accompanying lower estimate of crude oil supplies from non-OPEC nations. The EIA said that supply growth from non-OPEC countries will drop by 300,000 barrels per day to 700,000 barrels per day.

Brent crude April contracts added 45 cents to $60.99 per barrel late in the session in London, while April delivery WTI had added 35 cents to $60.44 per barrel by late morning on the New York Mercantile Exchange.