OPEC Lowers 2006 Outlook on Oil Demand
OPEC trimmed its forecast for 2006 oil demand growth Wednesday and said uncertainties over consumption in Asia and North America may trigger more cuts as months of near-record prices make themselves felt.
OPEC, supplier of more than a third of the world's oil, said in its monthly report it expects global demand to increase 1.57 million barrels per day (bpd) to 84.64 million. That compares with a projected 1.62 million bpd increase in OPEC's January report.
"The uncertainties surrounding demand growth, particularly in North America and Asia, could result in a downward revision," it added.
The cartel agreed at its last meeting in January to keep output close to a 25-year high to calm high prices that are threatening to hurt economic growth.
At the same time, the world's biggest producer, Saudi Arabia, and its OPEC partners have argued that prices are being driven by issues beyond the group's control -- such as worries that Iran's exports could fall victim to its nuclear dispute with the West, attacks on Nigeria's oil industry and violence in Iraq.
Supplies of crude oil are ample, OPEC says, and any shortages of refined products like gasoline are due to consumer countries' failure to invest in new refineries.
OPEC's latest forecasts supported that view.
The group pitched demand for its oil at 28.49 million bpd, a cut of 200,000 bpd from last month. OPEC's output limit is currently 28 million bpd, excluding Iraq, which has no official quota.
This week, U.S. crude dipped below $60 a barrel for the first time this year and U.S. gasoline hit its lowest price in a year as fuel stocks increased in the world's biggest consumer.
For the first quarter of the current year, OPEC saw demand for its oil at 30.16 million bpd, falling to 27.62 million bpd in the traditionally weaker second quarter.
OPEC pegged third-quarter demand at 27.87 million bpd and fourth-quarter demand at 28.34 million bpd.
OPEC next meets March 8 to chart production policy through spring.
Last week, the International Energy Agency trimmed overall global demand growth to 1.78 million bpd for 2006 from 1.8 million bpd in the previous month's report and left the call on OPEC crude unchanged at 28.6 million bpd.
CNN
OPEC, supplier of more than a third of the world's oil, said in its monthly report it expects global demand to increase 1.57 million barrels per day (bpd) to 84.64 million. That compares with a projected 1.62 million bpd increase in OPEC's January report.
"The uncertainties surrounding demand growth, particularly in North America and Asia, could result in a downward revision," it added.
The cartel agreed at its last meeting in January to keep output close to a 25-year high to calm high prices that are threatening to hurt economic growth.
At the same time, the world's biggest producer, Saudi Arabia, and its OPEC partners have argued that prices are being driven by issues beyond the group's control -- such as worries that Iran's exports could fall victim to its nuclear dispute with the West, attacks on Nigeria's oil industry and violence in Iraq.
Supplies of crude oil are ample, OPEC says, and any shortages of refined products like gasoline are due to consumer countries' failure to invest in new refineries.
OPEC's latest forecasts supported that view.
The group pitched demand for its oil at 28.49 million bpd, a cut of 200,000 bpd from last month. OPEC's output limit is currently 28 million bpd, excluding Iraq, which has no official quota.
This week, U.S. crude dipped below $60 a barrel for the first time this year and U.S. gasoline hit its lowest price in a year as fuel stocks increased in the world's biggest consumer.
For the first quarter of the current year, OPEC saw demand for its oil at 30.16 million bpd, falling to 27.62 million bpd in the traditionally weaker second quarter.
OPEC pegged third-quarter demand at 27.87 million bpd and fourth-quarter demand at 28.34 million bpd.
OPEC next meets March 8 to chart production policy through spring.
Last week, the International Energy Agency trimmed overall global demand growth to 1.78 million bpd for 2006 from 1.8 million bpd in the previous month's report and left the call on OPEC crude unchanged at 28.6 million bpd.
CNN
posted by Ottawa Gas Prices | 9:34 AM
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