by Xinhua writer Liu Gang
VIENNA, Aug. 11 (Xinhua) -- Oil prices fell in Tuesday's trading after OPEC
predicted a decline in global oil demand this year, suggesting recent stronger
oil prices were not a return to peak season oil demand.
The Organization of Petroleum Exporting Countries (OPEC) said Tuesday in
its monthly report that it expected world oil demand to fall 1.65 million
barrels a day (mb/d), or 1.93 percent, compared to last year.
The cartel, which controls a third of the world's oil production, also said
demand for its crude fell by 2.3 mb/d this year and would decrease further by
0.5 mb/d to 28 mb/d next year.
The figures were based on an assumption that non-OPEC producers would
further increase their supplies and the world economy would recover only slowly.
The cartel was particularly pessimistic about growth in world crude oil
consumption in the near future.
Oil prices have showed a V-shape trend since July. They fell from 70 U.S.
dollars per barrel to less than 62 dollars in the first two weeks of last month.
An ailing global market, a weakening U.S. consumer confidence index, rising
unemployment in America and the euro zone and a stronger dollar (oil is priced
in the U.S. currency) were to blame for the drop.
Prices have risen quickly since mid July, however, climbing above 70
dollars a barrel in the first week of this month, as the dollar weakened and
some economic indicators pointed to a recovery. International crude oil prices
have shown a similar trend.
But the United States, the world's biggest economy and major oil consumer,
has not shown a real recovery. The International Monetary Fund left unchanged
its outlook for the American gross domestic product in its latest report, seeing
a contraction of 2.6 percent this year.
In addition, the U.S. Commodity Futures Trading Commission has further
strengthened restrictions on excessive speculation in the energy market. These
factors have arrested the crude oil price recovery, with prices skidding Tuesday
and showing a downward trend again.
OPEC predicted a negative growth of 1.4 percent in the world economy this
year and a positive growth of 2.4 percent next year. But it said major crude oil
consumption markets, such as the United States, Japan and Europe, would not lead
the recovery.
Moreover, the severe and long-lasting world economic crisis may further
affect the world crude oil market and it was still not clear when and to what
extent the world economy would fully recover. Overall demand for crude oil would
not be large due to the current abundant stocks of crude oil and fuel oil
stocks.
OPEC observed that financial factors, such as the U.S. dollar exchange rate
and stock markets, had an increasing influence on the international oil prices.
Therefore, the overall world crude oil consumption was likely to decrease
further next year, but to a smaller extent.
OPEC will hold another oil ministers conference in September to decide the
new crude oil production quota.
During its last conference in May, it retained previous production levels,
saying it aimed to help the world economy recover.
However, after the conference, OPEC secretary general Abdullah Salem
Al-Badri, and OPEC's rotating president, Angolan oil minister Jose Maria Botelho
de Vasconcelos, suggested OPEC's ideal oil price was 80 U.S. dollars per barrel,
saying that this price "will not harm the world economic recovery."
This indicates OPEC may cut oil production at the September conference,
after keeping its quota unchanged at the previous two conferences.
