Oil price falls as demand outlook is 'highly uncertain'

The International Energy Agency has lifted its oil demand forecasts for 2010 and 2011 but warned slower than expected growth could lead to sharp falls in demand.

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by Deborah Hyde on Aug 11, 2010 at 10:14

Oil price falls as demand outlook is 'highly uncertain'

The price of oil was lower again in morning deals as global data disappointed and the International Energy Agency said the 'highly uncertain' global economic outlook presents serious risks that oil demand could be lower than expected.

Future dated Brent was down 43 cents, or 0.54%, at $79.17 as data from across the globe pointed to a slowdown in the pace of the recovery.

'A bearish view featuring a marked slowdown in global economic conditions would result in much weaker oil demand growth,' the IEA - which advises many of the world's governments - said in its monthly report.

Despite that uncertainty, the IEA has lifted its global oil demand for 2010 by 80,000 barrels per day to 86.6 million barrels a day and by 50,000 barrels per day to 87.9 million for 2011 based on its view that the global economy will grow 4.5% this year and 4.3% in 2011.

The IEA warned that if the world economy grows a third less than that, global oil demand would be some 290,000 barrels and 1.2 million barrels per day less in 2010 and 2011, respectively.

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3 comments so far. Why not have your say?

I am sorry Deborah but I am afraid there is no correlation between fundamentals and the oil price- there has not been for years. The oil price is controlled by a couple of specialist powerful trading houses such as Glencor Trafiigura and Vitol and banks such as Barclays through the derivatives market. The trade in vogue for a while was short dollar - long oil. the dollar rallies the oil price tanks. Lately it has been long DOW- long oil. The CFTC was suppposed to be looking into excessive speculation increasing margin requirement and or enforced delivery, but as ever they continue to look the other way and do nothing. The same is happening in grain right now as it did in rice a year ago. Next time you fill up your car dont blame the producers - blame the regulators and the moralless scum they are supposed to be controlling

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So oil is heading back down below $80 a barrel, and the pound has been strengthening against the dollar - so how come some forecasters are saying petrol will be @ £1.20 a litre by the Bank Holiday?!!!

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colin macdermott

Aug 11, 2010 at 17:03

we the unwashed don't understand the long and short business which makes us mugs , can a pin striped pratt somewhere get hold of the maipulators just once in a while such as the CFTC.

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