oil-supply problems

  1. 22,691 Posts.
    Oil prices surge (Thanks Mick):

    An International Energy Agency report stresses a strain from rising demand and weak supply growth.
    February 10, 2005: 10:30 AM EST

    LONDON (Reuters) - Oil prices jumped Thursday as the International Energy Agency said faster-than-expected demand and disappointing world supply growth threatened to keep the strain on world supplies.

    The IEA's monthly Oil Market Report cut its forecasts for non-OPEC supply growth, especially from Russia where supply has boomed in recent years.

    The agency, which advises industrialized nations on energy policy also revised up its 2005 oil demand forecast and reported a heavy fall in oil stocks during December.

    Light crude for March delivery was $1.19 higher at $46.65 a barrel following the report. London Brent crude was up 89 cents at $44.02.

    Lower expectations for Russian production growth and ongoing problems in other non-OPEC producers threatens to maintain the supply strain that fueled last year's 34 percent oil price rise.

    "While 2004 was characterized by surprises in demand, 2005 has begun with changed to the expected supply," the Paris-based agency said.

    The IEA also revised upwards world oil demand growth estimates by 80,000 bpd to 1.52 million bpd, based on a robust Chinese and South Asian outlook.

    The IEA warned however of the danger of an economic slowdown, adding: "The impact of the oil price rise over the past year has been felt and will continue to be felt in 2005."

    Latest official data Wednesday had shown that crude stocks in the United States are more than 20 million barrels above year-ago levels, while inventories of gasoline were nine million barrels in surplus to last year.

    Dealers said news that top exporter Saudi Arabia would maintain supplies at current levels in March had reduced the chance of an imminent cut in output by the OPEC producers' cartel.

    The Organization of the Petroleum Exporting Countries is due to review production policy on March 16 in Iran. Dealers had been wary that rising supplies and any sharp fall in prices may trigger an early OPEC cut agreement by telephone.

    source: http://money.cnn.com/2005/02/10/markets/oil.reut/index.htm


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