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Global oil demand 'is growing stronger than expected'

Global demand will support oil prices: Gulf Opec delegate

RIYADH, March 25, 2015

Stronger-than-expected global oil demand should help support crude prices at around $55-$60 a barrel in the next two months despite some signs of a growing glut in the United States, a senior Gulf Opec delegate said.

The comments appear to counter some market forecasts that the US oil glut may push prices to as low as $20-$30 and are a sign that the core Gulf Opec members remain confident about their strategy of defending market share.

"Global demand is definitely growing much stronger than expected. In December, January, and especially February, it was beyond what forecasts anticipated," the delegate said.

Low oil prices may have encouraged demand to pick up particularly in the US but also in Asia, the Gulf delegate, who declined to be identified, added.

Oil prices are expected to fluctuate around $55-$60 a barrel through April, when they may come under pressure because of seasonal refinery maintenance and rising stocks in the US, the Gulf Opec delegate said.

Underlining brimming US supplies, crude stocks rose nearly three times as much as expected, as storage at the Cushing, Oklahoma oil hub reached a new record, a government report showed last week.

"There are still uncertainties, prices will stay fluctuating around 55-60 dollars," the delegate said. "If you look at the US, it's really tough, stockpiling is rising. But if you look at the international market, stocks are on the higher side but they are still within the five-year average."

Saudi Arabian Oil Minister Ali al-Naimi said on Sunday the top oil-exporting country is producing around 10 million barrels per day (bpd), indicating higher demand is helping the kingdom claw back market share.

The Gulf Opec delegate said rising production reflects increasing exports to meet global demand as well as growing local needs.

"Increased production is due to two reasons: sales for the international market reflecting stronger demand from customers, not anything else, and local needs with the new refineries online," the Gulf delegate said. - Reuters
 




Tags: Oil | Gulf | Opec |

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