OPEC Cuts Demand Forecast for Oil, Warns of Further Cuts

October 12 00:00 2011

New York, October 12 (RainbowNewsLine.com) – The Organization Of Petroleum Exporting Countries (OPEC) has cut the demand forecasts of oil by 180,000 barrels a day. This correction in the forecast has come on the back of a global demand supply imbalance which is being caused by the current economic downturn. The economic downturn is taking its toll on both developed and developing countries. However, OPEC expects the hit to come from reduced demand in countries like China and India.

The overall demand for oil will still rise as compared to last year. However, the quantum of the rise has been revised by the OPEC in light of new market information. OPEC further hinted that the figures given by it may need to be revised if things turn ugly in the European crisis.

Representatives of OPEC said that while demand was falling, there was rising supply. The Libyan supply had increased from 7,000 barrels to 96,000 barrels in less than a month. It is soon expected to become normal. This may exert some downward pressure on the prices too.

Meanwhile, an Iran led group has been constantly trying to convince OPEC partners that lower oil output is in the best interest of all oil producing nations.