OPEC says too early tell if oil prices have peaked

PARIS (AFP) - The Organisation of Petroleum Exporting Countries said it was too early to tell if a recent fall in oil rates signalled that prices had peaked.
"It remains to be seen whether the steady fall in prices over the last three weeks confirms that the peak in prices for this year is behind us," OPEC said in a monthly report for November.
Global oil prices have slid since reaching all-time highs on October 22 when New York light sweet crude reached 55.67 dollars per barrel.
Since then, oil prices have fallen about 17 percent to 46.00 dollars in New York on Thursday.
OPEC applauded its members for boosting production this year to cool sizzling oil prices and said "OPEC remains ready to respond if the situation warrants."
But it warned that further declines in oil prices depended on the capacity of refineries to handle low grade crudes.
"Overall, the extent to which prices will ease ... largely depends on developments in the downstream sector, as the limited flexibility of refineries to process heavy crudes has placed a relatively high floor on prices," it said.
As long as refiners did not make the necessary investments to handle more cheap, low-grade crudes, then the oil market would remain vulnerable to disruptions to the supply of lighter, more expensive crudes.
The cartel also trimmed its forecast for global oil demand growth this and next year due to expectations for lower economic momentum.
OPEC estimated global demand of 2.5 million barrels per day this year, cutting its forecast by 120,000 bpd. At that lower rate of growth, total demand was expected to stand at 81.74 million bpd.
"The world oil demand estimate for the current year has been slightly adjusted downwards to account for the slowdown in Chinese consumption in the second half of the year as well as expected lower apparent demand in the FSU (former Soviet Union) due to the slower pace of economic activity," OPEC said.
It also lowered it forecast for 2005 oil demand growth by 180,000 bpd to 1.49 million bpd. At that rate of growth, total oil demand was seen at 83.33 million bpd next year.
The revision was based on an expectation for slower global economic growth, which OPEC now forecasts at 4.03 percent next year compared with an estimate of 4.14 percent previously.
However, it warned that Chinese growth remained uncertain because it was too early to determine how successful the Chinese government would be in slowing the booming oil-thirsty economy in the face of pressure from regional governments that are more interested in creating jobs and boosting investment.
"China remains the wild card for oil demand growth next year," OPEC said, forecasting that economic expansion in the country would slow to 7.6 percent next year from 9.1 percent this year.
The International Energy Agency, which represents big energy consuming countries, forecast on November 10 that global oil demand of 82.4 million bpd this year and 83.8 million bpd next year.
As for oil supply, non-OPEC crude production this year was seen at 49.91 million bpd, down 40,000 bpd from a previous estimate.
Meanwhile, OPEC production in October, as reported by non-OPEC sources, was seen at 30.23 million bpd, which was 80,000 bpd higher than in September.
OPEC is cagey about revealing exactly how much its members produce with some member countries treating their crude output as a state secret.

11/18/2004 - 19:22 GMT - AFP