WTI oil trading near $101 as IEA slashes crude oil demand outlook for 2012
BonTradeWTI oil futures open Thursday’s trading session at $101 a barrel after the International Energy Agency warned yesterday of a rising likelihood of a sharp slowdown, if not outright recession due to Europe’s debt crisis and slashed crude oil demand forecasts for 2012.
Latest WTI Oil Price
US Light crude oil futures for March 2012 delivery was trading at $101.21 a barrel, 08.21 GMT this morning in electronic trading on the NYMEX.
IEA Oil Outlook Update
The International Energy Agency took an ax to its oil demand forecast, after consumption fell in the fourth quarter of 2011 for the first time since the tail end of the credit crunch.
The IEA cut a further 500,000 barrels a day from its oil demand forecast for the first quarter of 2012, citing the same “growth impeding” combination of economic woes in Europe and continued high prices due to the tensions between Iran and the West.
Oil demand growth for the whole of 2012 was cut by 200,000 barrels a day to 1.1 million barrels a day.
The IEA, which represents major energy consuming countries, warned of “the rising likelihood of a sharp economic slowdown, if not outright recession,” that creates the possibility of zero oil demand growth in 2012.
“The data is supportive of our view that the oil price should move lower in the first half of 2012,” analysts at Bernstein Research said in a note to clients.
Not in a Bull Market
The IEA forecast, “should be a clear warning signal that we are not in a bull market,” said Tim Evans, an oil analyst with Citie Futures Perspective, though he said investors’ focus currently lies elsewhere.
“There are a whole lot of traders out there that are focused on things outside of the physical fundamentals, whether that is tensions with Iran or the S&P 500,” he said.
Oil prices have been stuck in a tight range near $100 a barrel since the beginning of the year.
Investors remain concerned about demand declines in oil and fuel products and the situation in Europe, but many are equally worried that rising tensions between Iran and the West could scuttle bets on falling oil prices.
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WTI oil trading near $101 as IEA slashes crude oil demand outlook for 2012
