Oil prices fell to roughly two-week lows on Friday as news of rising Iranian exports and returning supplies from Libya and Nigeria fueled concerns that the global glut will persist. Benchmark Brent crude futures fell below the $46-a-barrel mark, trading down 1.7 percent at $45.79 a barrel, down 80 cents, at 1045 GMT. U.S. West Texas Intermediate futures were down 73 cents, or 1.7 percent, at $43.18 a barrel, a two-week low. Both contracts have fallen 9-10 percent in one week, underlining how volatile the oil market currently is.
OPEC raised its forecast for global oil demand next year and through the end of the decade, anticipating that cheaper crude will spur consumption even as economic growth slows.
Demand will reach 95.3 million barrels a day in 2017, according to the producer group’s annual World Oil Outlook report released Tuesday. That’s an increase of 300,000 barrels a day from last year’s forecast. The Organization of Petroleum Exporting Countries also raised its outlook for oil use in 2018, 2019 and 2020, when it sees demand reaching 98.3 million barrels a day, or 900,000 more than the group projected in its previous annual outlook.
OPEC cut its estimates for crude prices by $20 a barrel for each year from 2016 to 2020, compared with its previous outlook. The group assumes crude will average $40 a barrel in 2016, and it raised its projected price by $5 a barrel in each of the following years through 2020. Brent has averaged about $44 a barrel so far this year.
The group’s 14 members are in talks with each other, and with non-member producers including Russia, to complete an initial agreement OPEC reached in September to limit its collective crude output in an effort to support prices. Benchmark Brent crude tumbled from more than $115 a barrel in June 2014 amid a supply glut and ended last week trading 8.3 percent lower at $45.58. Exploration for new crude deposits has declined with prices, prompting concern that producers may not be able to meet future demand.
Royal Dutch Shell Plc, the world’s second-biggest energy company by market value, predicts demand for oil could peak in as little as five years. “We’ve long been of the opinion that demand will peak before supply,” Shell Chief Financial Officer Simon Henry said on a conference call on Nov. 1.
more at: http://www.bloomberg.com/news/articles/2016-11-08/opec-raises-oil-demand-forecast-on-outlook-for-cheaper-crude