GLOBAL DEMAND GROWING FASTER
AOG. Opec has announced that global demand for oil & gas is growing faster than analysts had previously thought. The organisation raised its predictions for oil consumption in 2014 for a second straight month.
Opec's view on global oil consumption puts it as odds with the U.S. government's Energy Information Administration, which on Tuesday cut its forecast.
In a monthly report, Opec said global demand will rise by 1.14 million barrels per day (bpd) this year, up 50,000 bpd from its previous forecast. It also raised the 2014 projection for global demand for Opec's crude.
"While many challenges remain, the expected improvement in the global economy is also resulting in higher oil demand," said the report from Opec's Vienna headquarters.
OPEC cited further signs of strong oil demand in the world's top consumer, the United States, as well as a stabilising rate of demand contraction in Europe - where oil use has been held back for years by weak economies.
But the group also sees an increasing chance of slowdown in emerging economies - the source of much of the world's oil demand growth. Concern over China was weighing on currencies closely linked to commodities on Wednesday.
"This rising risk of a slowdown in growth in the emerging economies has been mirrored in the foreign exchange markets in recent months," Opec said. "Recent developments in Ukraine have added to this year's growth risk."
According to secondary sources cited by the report, Opec raised its own output to 30.12 million bpd in February, as a ramp-up in Iraqi exports outweighed disruption to Libyan shipments and lower Saudi Arabian output.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.