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Last Updated: Wednesday, 9 February, 2005, 17:01 GMT
Crude oil price rises on report
Shuaiba oil refinery in Iraq
Oil prices rose in January after a cold snap in the US
Oil prices in the United States have rebounded after earlier slipping below $45 a barrel for the first time in more than a month.

The price had fallen on hopes the mild US winter meant stockpiles were rising.

But prices rose a dollar a barrel as inventory data showed an unexpected fall in crude oil stockpiles.

US light crude went to $46.40 a barrel, recovering from a drop to $44.83, as the data showed crude inventories fell one million barrels last week.

'Ten minute reaction'

The figures from the US Energy Information Administration (EIA) came as a surprise, as most analysts had been predicting stocks to rise.

However, imports of oil had risen less than had been expected.

"I expected a build in crude stocks," said Ed Silliere, an analyst at Energy Merchants.

"The (EIA) report was mildly bullish at the best. I would be surprised if the market reacts for more than ten minutes."

US crude has been in general decline since January, when prices pushed close to $50 on concern the-then cold snap in the US would increase demand for heating fuel.

Since then oil has been traded at between the mid-$40s and a 2005 peak of $49.75, still below a record $55.67 hit last October.

Fears that oil cartel Opec may call for output cuts had also boosted prices.

Growing stockpiles

Opec pumps about a third of the world's oil, and with the worst of the Northern hemisphere winter over could decide to keep prices high by cutting back on production.

On Tuesday, however, Saudi Arabia - the world's leading oil producer - said it was planning to increase capacity to 12.5 million barrels a day within four years from today's 11 million.

It currently pumps nine million barrels of Opec's 27 million, and has a quarter of the world's total reserves.

Just as important, Chinese imports of crude oil - a key factor in 2004's upsurge in oil prices to a high of more than $55 - were down 24% in January from the previous year, according to the Xinhua news agency.

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