A downward revision of estimated global oil demand by OPEC has caused oil prices to drop. OPEC has cut its estimate for global oil demand for the fifth time in a row this year, as economic forces are beginning to exert their influence on energy prices. The impact of Hurricane Katrina is also being felt through the reduction in the economic activity in USA and the rise in the global price of petroleum products. New York's light sweet crude for delivery in October, fell to US$64.70 per barrel. In London, the price of Brent North Sea crude for Oct delivery slipped to US$63.20 per barrel.
As per OPEC, demand for oil is now expected to increase by 1.7% to 83.5 mln bpd in 2005, from year ago levels. In an earlier forecast in August, OPEC had said global oil consumption would increase by 1.9% in 2005 and average 83.6 mln bpd. This downward revision can be attributed to low growth demand rates for the first half of the year, especially from USA and China. OPEC also cut its forecast for 2006, estimating a 1.8% increase in demand.
The International Energy Agency maintains its plan to release 60 mln barrels of oil from strategic reserves over a 30-day period following the damage caused by Katrina in the US. However, there are no plans to either extend the release period, or increase the volume of releases.
16-Sep-05 
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