Lagos — Crude oil prices hit a six-month high above $63 a barrel yesterday ahead of today's meeting of the Organisation of Petroleum Exporting Countries (OPEC).

This is coming as top producer Saudi Arabia said the global economy had strengthened enough to cope with oil at $75 to $80 a barrel.

It was also some cherry news from the Nigerian National Petroleum Corporation (NNPC) yesterday as it denied claims by the Movement for the Emancipation of the Niger Delta (MEND) that its attack on the Chanomi Creek pipeline had disrupted the operation of the 125,000 barrels per day Warri Refinery and Petrochemical Company (WRPC).

Speaking against the backdrop of expectations that the OPEC may leave outputs at their current levels at today's meet, Saudi Oil Minister Ali Naimi said oil prices would continue to rise, recovering from lows near $32 at the turn of the year.

"The price rise is a function of optimism that better things are coming in the future. We see offshoots of recovery," he added.

"Demand is picking up, especially in Asia", Naimi told reporters in Vienna, Austria.

The minister said OPEC did not need to change its output policy, which has already seen the group agree to remove 4.2 million barrels per day of oil from the market in a bid to shore up prices battered by recession.

United States crude oil for July delivery rose to touch $63.45 a barrel, the highest level since mid-November, before easing slightly to trade up 64 cents at $63.09 a barrel by 1340GMT.

London Brent crude rose 79 cents to $62.03 a barrel.

Oil prices gained more than one per cent on Tuesday, bolstered by a jump in US consumer confidence.

Signs of a modest recovery in Japanese exports further boosted expectations the world is slowly emerging from its worst financial crisis in decades.

"We're not really seeing a strong recovery yet, but I think OPEC are implying they don't see oil demand falling any further," VTB Capital analyst Andrey Kryuchenkov told Reuters. "Everyone talks about green shoots but we're not completely out of the woods - to see a real price rally we'll need to see a larger pick-up in demand."

Global oil demand is seen falling at the fastest rate since 1981 this year, with the International Energy Agency (IEA), adviser to 28 industrialised nations, predicting a 2.56 million barrel fall.

Crude inventories have risen to around 62 days of forward cover, but expectations of a slight drawdown in US crude inventories are lending support to prices, analysts said.

A preliminary Reuters poll ahead of US weekly inventory data showed forecasts for a 1.1 million drawdown in crude stocks and a 1.8 million decline in gasoline stocks last week.

Data from the American Petroleum Institute (API) has been delayed by one day until yesterday, while US Energy Information Administration oil inventory data will be released today due to the US Memorial Day holiday at the start of this week.

Prices also shot above the key technical level of the 200-day moving average yesterday, for the first time in more than eight months, adding to some analysts' convictions that oil has found a new price floor at $60 and may rise toward $65.

Meanwhile, the Group General Manager, Group Public Affairs Division of NNPC, Dr. Levi Ajuonuma, told THISDAY yesterday that Warri Refinery was intact.

Ajuonuma said the Warri Refinery has sufficient crude oil supplies to maintain its current output despite a recent militant attack on the Chanomi Creek Pipeline, the main feeder pipelines that supply crude oil to the refinery.

He said: "Warri is working. Warri is receiving crude. We can't disclose how we do it, but all we know is that Warri is currently working at 70 per cent capacity. Port Harcourt Refinery is also working gradually but it has power problem."

Though the country has four refineries capable of refining 445,000 barrels of crude oil per day, only two refineries - Warri and Port Harcourt - are currently in operation.

MEND attacked the Chanomi Creek pipeline on Sunday in its first major strike since the Joint Task Force (JTF) launched sea, land and aerial offensive two weeks ago on militants' locations around Warri.

The militants also attacked Chevron's 100,000 barrels per day of crude oil production.

Warri Refinery was shut down for two years in February 2006 when its main feeder pipeline was blown up by the militants.

However, the plant reopened 15 months ago after the Federal Government awarded a contract of $52 million for the repair of the Chanomi Creek Pipeline, the main feeder pipeline that supplies crude oil to Warri and Kaduna Refineries.

The contract for the repair of the pipeline was awarded to a company owned by an indigene of Niger Delta as part of the strategies put in place by the government to resolve the protracted crisis in the oil-rich region.

The initial value of the contract during the administration of former President Olusegun Obasanjo was estimated at about $100 million, but after a renegotiation with the firm by the present administration, the amount was brought down to $52 million.

The inability of the refineries to work last year cost the country an estimated $4 billion in importation of about 5 million tonnes of petroleum products.