OPEC Reduces Demand Predictions on Global Uncertainty (USO)
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The Organization of Petroleum Exporting Countries reaffirmed its forecast for global growth of 3.6 percent in 2011, but reduced its world oil demand prediction by 180,000 b/d. The reduction represents a 900,000 b/d growth over 2010.
The Organization anticipates the U.S. economy to grow by 1.6 percent in 2011 and by 1.8 percent in 2012. Commercial oil inventories in the U.S. declined by 13.4 million barrels in September as crude inventories fell by 16.8 million barrels and product inventories rose by 3.4 million barrels.
China’s economy is expected to grow by 9 percent in 2011 and by 8.5 percent in 2012. Amid new government policies, however, the organization notes major uncertainty in oil demand.
OPEC lowered its economic forecast for India to 7.6 percent for 2011 and 2012, citing rising retail prices which are predicted to lower total oil consumption.
“Due to the weakening economic outlook, the forecast for world oil demand growth in 2012 has been revised down to stand at 1.2 million b/d,” reports the Organization.
Non-OPEC oil supply is expected to rise by 400,000 b/d in 2011, a 160,000 b/d reduction from the Organizations previous report. OPEC increased its 2012 non-OPEC oil supply forecast to 800,000 b/d due to larger than expected growth in Brazil, Canada, Colombia, and the US.
The organization commented, “Sentiment in the product markets turned bearish, erasing the recovery of the previous months as product margins plummeted. Weaker demand throughout the driving season in the Atlantic basin and renewed concerns about economic developments in the Euro-zone helped to dampen market sentiment. In September, refinery margins showed a sharp drop of $3/b in the Atlantic basin.”
NYMEX crude oil is lower heading into the afternoon session. Crude last traded at $84.92, down almost 50 cents for the session. The US Oil Fund (NYSE: USO) is down 1.1 percent.
The Organization anticipates the U.S. economy to grow by 1.6 percent in 2011 and by 1.8 percent in 2012. Commercial oil inventories in the U.S. declined by 13.4 million barrels in September as crude inventories fell by 16.8 million barrels and product inventories rose by 3.4 million barrels.
China’s economy is expected to grow by 9 percent in 2011 and by 8.5 percent in 2012. Amid new government policies, however, the organization notes major uncertainty in oil demand.
OPEC lowered its economic forecast for India to 7.6 percent for 2011 and 2012, citing rising retail prices which are predicted to lower total oil consumption.
“Due to the weakening economic outlook, the forecast for world oil demand growth in 2012 has been revised down to stand at 1.2 million b/d,” reports the Organization.
Non-OPEC oil supply is expected to rise by 400,000 b/d in 2011, a 160,000 b/d reduction from the Organizations previous report. OPEC increased its 2012 non-OPEC oil supply forecast to 800,000 b/d due to larger than expected growth in Brazil, Canada, Colombia, and the US.
The organization commented, “Sentiment in the product markets turned bearish, erasing the recovery of the previous months as product margins plummeted. Weaker demand throughout the driving season in the Atlantic basin and renewed concerns about economic developments in the Euro-zone helped to dampen market sentiment. In September, refinery margins showed a sharp drop of $3/b in the Atlantic basin.”
NYMEX crude oil is lower heading into the afternoon session. Crude last traded at $84.92, down almost 50 cents for the session. The US Oil Fund (NYSE: USO) is down 1.1 percent.
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