Oil towards $98 on signs of a steady output (Reuters) (18-01-2011)

SINGAPORE - Brent crude futures edged higher on Tuesday after OPEC members signalled the group would maintain production levels even as prices flirt with $100 a barrel.

ICE Brent for March added 32 cents to $97.75 a barrel at 0736 GMT. The front-month Brent contract on Friday touched $99.20, the highest price since October 2008.

Operators of the Alaskan line hope to ramp up flows to 500,000 barrels per day (bpd) by Tuesday while shipments are set to reach to 640,000 bpd, or about 12 percent of U.S. output, within days.

The head of the International Energy Agency on Monday described the current oil price as "alarming" and warned it could be damaging to the world economy.

U.S. crude benchmark prices fell 31 cents to $91.23, but most of that drop came during Monday. The New York Mercantile Exchange (NYMEX) is combining Monday's and Tuesday's trades into one session because of the Martin Luther King holiday and will produce just one settlement after Tuesday's close.

The spread between the ICE and NYMEX front-month futures contracts has narrowed since February Brent expired on Friday. At one point on Friday, the spread between the two February contracts exceeded $8 a barrel, its widest in 23 months.

OPEC raised its global oil demand growth forecast by 50,000 barrels per day to 1.23 million in 2011, and said the world oil market remained well supplied and inventories should build in the first half of the year.

Source: Reuters