The oil prices continue going down. On September 10, 2014 Brent oil price went down to a minimum level during 17 months. WTI oil price went down to the eight-month minimum. The reason of price decline was OPEC’s review, in which it reduced the forecast of the world demand in oil in 2014-2015. The news that oil resources in the US reduced less, than it was expected, also had exerted extra pressure on the market.
In its monthly review of the oil market Organization of Petroleum Exporting Countries (OPEC) reduced the forecast of the world oil demand in 2014-2015 by 50,000 barrels a day and 20,000 barrels a day, respectively. Therefore, OPEC believes that this year growth of demand will total 1.05 million barrels a day (up to 91.19 million barrels a day), while in 2015 – 1.19 million barrels a day (up to 92.38 million barrels a day).
“It looks like nobody, even Saudi Arabia, would like to compensate the growth of deliveries by reduction of their own production. Saudi Arabia has recently reduced the price of October oil deliveries to Asia to a minimum level since November 2010 or even January 2009 in an attempt to preserve its share at the market.
Meanwhile, OPEC has reduced the forecast of its own oil demand. According to OPEC estimates, in 2015 it needs to produce 29.2 million barrels a day, down 200,000 barrels a day against the previous August evaluation.
The markets have negatively reacted to another important document. The US Energy Information Agency (EIA) has released the data of the US oil and oil products resources. According to EIA, this week till September 5 oil resources in the US reduced by 1,358,600 barrels, a third less, than the analysts expected (-1.5 million barrels). This has accelerated the price decline,” said Adam Wise, Managing Director of John Hancock company.
The dynamics of oil products resources has seriously disappointed investors of the oil market: during this period US petrol resources increased by 2.4 million barrels up to 212.4 million barrels, while the volume of distillate in the storages of the country – by 4.1 million barrels up to 127.5 million barrels.
