Organization of Petroleum Exporting Countries President Chakib Khelil said he expects oil demand to decrease in the second quarter and that the group may agree to cut production at its next meeting.
``We don't expect to put more oil in the market,'' Khelil told reporters in Algiers today. Inventories are ``very high and international demand is expected to decrease in the second quarter. Organization of Petroleum Exporting Countries is going either to keep production or reduce it.''
Organization of Petroleum Exporting Countries members, whose ministers meet on March 5, are concerned that inventories and prices will fall during the second quarter, when consumption usually declines amid waning demand for winter heating in the northern hemisphere.
Crude oil for April delivery rose 0.6 percent to settle at $98.81 a barrel on the New York Mercantile Exchange on Feb. 22. The April contract rose 3.5 percent this past week. Prices are up 62 percent from a year ago.
``Prices are high because of speculation and geopolitical problems,'' Khelil said, adding that the market has ``already consumed the idea that Organization of Petroleum Exporting Countries is going to reduce production. That's why prices are going up.''
``We are still expecting a downside correction in the crude oil price, but not as strong as we previously assumed,'' said Dora Borbely, an economist at ekaBank Deutsche Girozentrale in Frankfurt, on Feb. 22. ``The price may drop in coming months, especially during spring, to probably $85 a barrel on a monthly average, but not much lower.''
Weakening Demand
Crude oil may fall this week because of rising U.S. inventories and weakening demand as refineries perform seasonal maintenance.
Twenty-four of 35 analysts surveyed by Bloomberg News, or 69 percent, said prices will drop through Feb. 29. Ten of the respondents, or 29 percent, said futures will rise and one forecast that prices will be little changed. Last week, 56 percent said oil would drop.
The 13-member Organization of Petroleum Exporting Countries, which controls more than 40 percent of the world oil supply, agreed to keep quotas unchanged at a Feb. 1 meeting in Vienna.
``We don't expect to put more oil in the market,'' Khelil told reporters in Algiers today. Inventories are ``very high and international demand is expected to decrease in the second quarter. Organization of Petroleum Exporting Countries is going either to keep production or reduce it.''
Organization of Petroleum Exporting Countries members, whose ministers meet on March 5, are concerned that inventories and prices will fall during the second quarter, when consumption usually declines amid waning demand for winter heating in the northern hemisphere.
Crude oil for April delivery rose 0.6 percent to settle at $98.81 a barrel on the New York Mercantile Exchange on Feb. 22. The April contract rose 3.5 percent this past week. Prices are up 62 percent from a year ago.
``Prices are high because of speculation and geopolitical problems,'' Khelil said, adding that the market has ``already consumed the idea that Organization of Petroleum Exporting Countries is going to reduce production. That's why prices are going up.''
``We are still expecting a downside correction in the crude oil price, but not as strong as we previously assumed,'' said Dora Borbely, an economist at ekaBank Deutsche Girozentrale in Frankfurt, on Feb. 22. ``The price may drop in coming months, especially during spring, to probably $85 a barrel on a monthly average, but not much lower.''
Weakening Demand
Crude oil may fall this week because of rising U.S. inventories and weakening demand as refineries perform seasonal maintenance.
Twenty-four of 35 analysts surveyed by Bloomberg News, or 69 percent, said prices will drop through Feb. 29. Ten of the respondents, or 29 percent, said futures will rise and one forecast that prices will be little changed. Last week, 56 percent said oil would drop.
The 13-member Organization of Petroleum Exporting Countries, which controls more than 40 percent of the world oil supply, agreed to keep quotas unchanged at a Feb. 1 meeting in Vienna.
Source: Bloomberg| by Ahmed Rouaba
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