Opec think demand for the cartel’s oil will fall to the lowest level since 2003 next year.
It is evident in their report in December, where they lower estimate for their oil deliveries with 300,000 barrels from November report.
For the next year they foresee a delivery of 28.9 million barrels per day on average in 2015.
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Oil analyst Torbjorn Kjus DNB think Opec underestimate demand effect of low oil prices.
– I think it is illogical to revise down demand growth when oil prices fall so sharply, he says to E24, and elaborates:
– Opec has not taken into account the increased consumption is likely to happen especially in the US and China, as a result of a lower price. Such a large drop in oil prices, will probably have an effect on the demand side about 3-6 months. In the US demand for gasoline now moving up.
Oil cartel expects his side a fall in demand from Europe and Asia, and an increase in demand from North America.
Adjusts up demand
In Kjus’ estimates for next year is the need for oil from OPEC revised up from 29.3 million barrels per day, to 29.6 million barrels.
– We changed the methodology for our calculations after Opec said that they would leave everything to the market. Because we believe in low price, we assume that demand will increase and supply will fall by 2015.
The price for a barrel of North Sea oil (Brent spot) vaker writing around $ 64 a barrel, after it plunged further on Wednesday afternoon when oil inventory data from the US showed a surprising increase.
Kjus do not think that it becomes relevant with another meeting in the oil cartel before the oil price comes far down in the 40s.
– I think what happening now, it is Saudi Arabia expected that would happen. It was obvious intentionally that there should be an extraordinary meeting before the scheduled meeting in June next year – all logic indicated that they should monitor the market more now that it is so turbulent. Thus anticipated that they should keep an extraordinary meeting in February or March. When they then chose not to do it, was the message that we will not cut even more negative for price formation.
– As long as Saudi Arabia will not have another meeting, I think the chance that there will not be another meeting before the summer is great.
Everyone must with prior cuts
Countries like Iran, Mexico and Venezuela has already lowered their budgets for next year, as a result of the low oil price. Especially Venezuela argued vigorously for production cuts ahead of Opec meeting in November.
The result was known that oil cartel not touched production target of 30 million barrels per day, and thus left it to the market to regulate the price.
If Opec will now go back to its old strategy, must all be with and take bandwagon believes oil analyst.
– It is not possible to get to production cuts until everyone is in on it. Saudi Arabia does not take another meeting before it is cleared. Along with Kuwait and the Emirates they see enough of themselves as extremely strong, otherwise they had given something (read: cut in production) at the previous meeting.
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