OPEC: Strong oil demand will continue through ‘08
Cartel has no plans to boost supply to reduce prices
By Tom Stundza -- Purchasing, 10/17/2007 9:49:00 AM
The Organization of Petroleum Exporting Countries (OPEC) says world crude oil demand remains steady despite high prices and gave no indication of planning an increase in output to ease prices from this week’s all-time highs.
OPEC in its October oil market report cut its fourth-quarter estimate of non-OPEC oil supply by 110,000 daily barrels from its September report to 51.04 million barrels/day, citing declines in output in Mexico, the United Kingdom, Brazil and Sudan. The group kept projected demand for the current quarter virtually unchanged, revising its previous month’s forecast down a minimal 10,000 barrels to 87.07 million barrels/day.
While the OPEC report says perceptions of market tightness have eased, it acknowledges that “uncertainties remain large,” including geopolitical tensions, declining non-OPEC supply and cooler weather conditions as the northern hemisphere heads into winter. Light, sweet crude for November delivery have been close to $88/barrel in electronic trading on the New York Mercantile Exchange on traders’ fears that Turkey will pursue Kurdish rebels into Iraq and disrupt oil supplies in the region.
Whenever there is any escalation in political tensions in the Middle East, oil markets become concerned, commodity strategists tell the Associated Press. AUDIO:Oil industry analyst Phil Flynn of Alaron Trading in Chicago on what's driving prices of crude oil.
OPEC left world oil demand growth for 2007 and 2008 unchanged at 1.3 million daily barrels, with most of that projected to come from developing countries in Asia and the Middle East. The cartel says world oil demand this year is expected to rise to 85.75 million barrels a day, up 1.52% from 2006. In 2008, demand was projected at 87.09 million barrels a day, a rise of 1.56% from 2007.
Now Playing: 