• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Oil Prices Slip After OPEC Lowers Demand

Posted on: Friday, 17 March 2006, 12:00 CST

LONDON - Oil prices slipped Friday after OPEC lowered its demand forecast for this year and amid signs that U.S. crude oil inventories are growing.

The Organization of Petroleum Exporting Countries lowered its forecast Friday for global oil demand growth in 2006 by 110,000 barrels a day. OPEC, which cited lower consumption in the U.S. and Asia, said its prediction comes after signs of larger oil inventories in the U.S., along with higher demand in January and February.

Light sweet crude for April delivery dropped 30 cents to $63.28 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. The price had jumped $1.41 Thursday to settle at $63.58 a barrel on news over the U.S.-led attack in Iraq and U.S. concerns over Iran.

Brent crude for May fell 18 cents to $64.03 a barrel on London's ICE Futures exchange.

Nymex gasoline futures fell more than a cent to $1.8622 per gallon (3.8 liters). Heating oil futures slipped less than half a cent to $1.8094. Natural gas futures fell more than 6 cents to $7.200 per 1,000 cubic feet.

OPEC set oil demand growth for this year at 1.46 million barrels a day and demand for the year at 84.5 million barrels a day. This brings its estimate in line with recent revisions by agencies such as the International Energy Agency and the Energy Information Administration.

David Thurtell, a commodity strategist with the Commonwealth Bank of Australia in Sydney, said oil prices had gone up a "fair bit in recent days" on concerns about the conflict in Iraq and troubles in Nigeria.

"But stocks have been building nicely," he said, referring to the U.S. Energy Department's weekly report that showed crude oil inventories rose by 4.8 million barrels last week to 339.9 million barrels, or 10 percent above year-ago levels.

Oil prices are about 12 percent higher than a year ago, reflecting worries about the stability of supplies from Iran, Nigeria and elsewhere.

In Nigeria, output has been disrupted by a wave of militant attacks over the last two months that has forced the country to cut daily exports by 20 percent. A militant group, demanding a great share of wealth from the oil pumped from its land, has threatened more attacks.

Source: Associated Press/AP Online

More News in this Category