Energy body predicts low rise in demand for oil

Oil prices fell about 3 percent on Wednesday, hitting August lows, on worries US crude inventories were piling up and Iraq was bringing on more supply that would intensify OPEC’s fight for market share.

The oil price war is intensifying as OPEC relentlessly pumps crude, flooding the USA with imported oil and undercutting shale companies as low prices gut the industry. The U.S. Energy Information Administration will release its weekly crude oil inventory report later on Thursday, a day later than usual due to a public holiday, and the…

OPEC’s latest challenge to US shale oil producers would be about two miles long, lined end to end, and weigh nearly 3 million metric tons. “This may take a few time, as oil consumers are not reacting as quickly to changes in price as they have in the past, and, even though the rise of tight oil has created scope for more short-term flexibility on the supply side, there is still significant lag in the response of most sources of production to a change in price”. Iran, expected to be free of Western sanctions this year, needs major investment to return to the 2.5 million bpd in production seen prior to 2012. “Quite the opposite: a period of low oil prices is the moment to reinforce our capacity to deal with future energy security threats”, he said.

In China, factory output grew slower than expected at an annual 5.6 percent in October, data showed on Wednesday, slightly below analyst forecasts of 5.8 percent and down from 5.7 percent in September.

The Organization of Petroleum Exporting Countries, however, said it was keeping its output steady on expectations of growing demand from Asia.

Iraq is OPEC’s No. 2 crude producer. Combined, the European Union, Japan, and the US will reduce oil demand by roughly 10 million barrels per day by 2040, offsetting almost 50% of the demand growth from other parts of the world.

“The countries that have the highest gasoline prices have substantial taxes”, said Robert Rapier, an energy analyst and writer for Investing Daily, who worked in the oil industry for many years.

Oil prices rose on Tuesday, snapping a four-day losing streak triggered by oversupply concerns.

The Paris-based worldwide Energy Agency (IEA) is forecasting oil prices to stay low for many years.