Interesting article that suggests demand is easing for oil.
IEA lowers estimated Q4 demand for Opec crude
By Toby Shelley
Published: November 9 2000 08:23GMT | Last Updated: November 9 2000 14:43GMT
The International Energy Agency has lowered its
fourth-quarter estimate of demand for crude produced by
members of the Organisation of Petroleum Exporting
Countries by 600,000 barrels a day, to 28.5m b/d.
With October production by Opec estimated at 29.52m
b/d, the figures may suggest the oil market is heading
back towards a surplus faster than previously thought.
Although the 'call on Opec plus stock change' estimate
for the first quarter of next year has been revised upwards by 200,000 b/d, for the
whole of next year it has been lowered by 100,000 b/d.
The IEA report follows hard on the heels of a US Department of Energy report
issued late Wednesday that assumes production by the 10 Opec members party
to the output regime will be redued by 600,000 b/d by the spring in order to limit
price falls. The US report refers to "a significant developing oversupply" that may
move prices down by $3-$4 a barrel before the end of winter. The average 2001
price of US crude imports is expected to be $24 a barrel, some $4 lower than for
this year.
The Paris-based IEA's monthly oil market report, released on Thursday morning,
also said that production by the 10 Opec members party to the output regime was
26.49m b/d in October, well above the target level of 26.2m b/d and approaching
the targeted November target of 26.7m b/d. This means that it remains unclear
whether the 500,000 b/d output increase triggered by Opec oil prices remaining
above $28 a barrel for 20 working days in October, will bring new volumes to the
market.
On the one hand the target level has almost been reached due to earlier
overproduction. On the other, the trigger mechanism specifies a 500,000 b/d
increase. The IEA says October output increases were led by Saudi Arabia and
Nigeria (and Iraq, which is not party to the output regime) with Iranian output
falling, underlining the fact that many Opec members are at or near capacity
constraints.
Including Iraq, Opec's October output was 29.5m b/d, up 460,000 b/d while
non-Opec output rose 440,000 b/d as North Sea maintenance was completed.
OECD industry stocks fell by 400,000 b/d in September. The third quarter stock
rise is put at 100,000 b/d, much lower than usual and from a much reduced base.
Demand in the OECD in October was 1.3 per cent up on the same period a year
ago. |
