Fundamentals suggest oil prices may have peaked

Fundamentals suggest oil prices may have peaked

London (Platts)--10Nov2004


Normal oil stock levels in OECD countries and growing sweet crude supplies
suggest oil prices may have peaked in the short term despite ongoing
geopolitical tensions and tight OPEC spare capacity playing on supply
concerns, the International Energy Agency said Wednesday. 

In its latest report, the IEA said world oil markets are currently well-supplied

with OECD crude stocks in the middle of their historic range and world economies

are showing signs that persistent high oil prices are beginning to impact on GDP
demand forecasts. The IEA left its forecasts for total world oil demand at
82.4-mil b/d in 2004, unchanged from its last report, but this year's demand
growth forecast has been trimmed by 70,000 b/d to 2.64-mil b/d, reflecting an
upward adjustment to baseline 2003 demand. "Many countries have begun to feel
the economic impact of energy and commodity prices on their economies and are
revising GDP estimates downwards. Consequently we may be witnessing early
signs of lagged prices effects on global economic growth," the IEA said.

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