Oil Slides as IEA and OPEC Dial Back Forecasts

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Oil prices crashed in 2014

Oil prices fell on Thursday after the International Energy Agency cut its growth forecast for oil demand this year.

The International Energy Agency trimmed its projection for global demand growth to 1.16 million barrels per day as it expressed doubts over the impact the upcoming freeze deal will have on global supply.

The revised expectations came a day after Organization of Petroleum Exporting Countries (OPEC) cut its own forecast for demand growth. OPEC also noted the possibility of further reductions in overall demand.

Brent crude futures (LCOc1) gave up 54 cents from the previous session at $43.64 a barrel by 0827 GMT, while U.S. crude (CLc1) shed 47 cents to trade at $41.29 a barrel.

Fifteen of world’s biggest oil exporters, including Saudi Arabia and Russia, will be meeting in Qatar on Sunday to discuss and finalize the details of the output freeze deal initially agreed upon by at least five countries in February.

However, market players are beginning to doubt if the freeze deal would have any impact after Alexander Novak, Russian oil minister, told energy analysts in Moscow during a closed-door briefing on Wednesday that there wouldn’t be any binding agreements and that the meeting would more likely be just a declaration of intent to limit output at their January levels.

Analysts believe the producers’ meeting will have little effect on the global supply, which is currently oversaturated by more 2 million barrels per day.

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