VIENNA: The OPEC oil producers’ organization said the worst of the impact from the economic crisis was past for the oil markets, as it fractionally reduced its demand estimate for 2009 yesterday.
“In light of the considerable challenges the world economy and commodity markets, particularly the oil market, have undergone, the worst appears to be behind us,” the Organization of Petroleum Exporting Countries wrote in its latest monthly report.
“As the world economy stabilizes, the world oil demand appears to be settling down,” it said.
“Industrial production activities are steadying and in some parts of the world have even improved slightly. This should stop the bleeding in oil demand. There are no significant downward revisions to our previous oil demand forecasts.”
OPEC estimated that demand would contract by 1.62 million barrels per day (bpd) or 1.89 percent in 2009 — only a marginal downward revision in demand from its earlier forecast.
In its previous monthly bulletin released in May, OPEC had been penciling in a contraction of 1.57 million bpd or 1.83 percent for 2009.
Nevertheless, uncertainties remained, OPEC cautioned.
“US oil demand is the wild card and any further downward adjustment in the country’s oil demand would have an impact on total world oil demand,” it said.
One of the major uncertainties was whether the current optimistic sentiment would prove sustainable, which will largely depend on improvements in the real economy and in financial markets, OPEC continued.
“Despite spreading optimism that the deep economic downturn may reach bottom in the coming quarters, the world economy is still facing considerable challenges.”
Unemployment was still rising in industrialized countries, banks’ balance sheets remained shaky and private consumption, investment and exports were expected to remain subdued.
“These concerns could dampen or delay a global recovery.
Moreover, markets are beginning to worry about the consequences of the huge public deficits.”
Oil prices surged to a new 2009 high on Thursday, but were down slightly on profit-taking yesterday, analysts said.
New York’s main futures contract, light sweet crude for delivery in July, eased 64 cents to $72.04 per barrel, after hitting $73.23 on Thursday — the highest level since October.
Brent North Sea crude for July delivery declined 59 cents to $71.20 yesterday, after touching 72.27 the previous day.
