Crude Oil Declines

Crude oil fell after the International Energy Agency and OPEC cut their global demand forecasts because of the recession in major consuming countries., Bloomberg 3/13/2009 1:42:28 PM

The IEA, which advises 28 developed nations on energy policy, lowered its consumption outlook 0.3 percent to 84.4 million barrels a day in a monthly report today. OPEC reduced its 2009 oil-demand prediction, saying the global economy was in a dreadful situation.”

Crude oil for April delivery fell 78 cents, or 1.7 percent, to settle at $46.25 a barrel at 3:02 p.m. on the New York Mercantile Exchange. Prices have gained 1.6 percent this week and are 3.7 percent higher so far this year.

The Organization of Petroleum Exporting Countries lowered its estimate for 2009 global demand by 520,000 barrels to 84.6 million barrels a day in this month’s report. Consumption will now drop by 1.01 million barrels a day this year, according to the report.

OPEC ministers will meet on March 15 in Vienna to discuss making a production cut. The group has reduced daily output targets by 4.2 million barrels since September.

The 11 OPEC nations bound by production quotas, all except Iraq, pumped 25.7 million barrels a day last month, today’s IEA report showed. That compares with OPEC’s Jan. 1 limit of 24.845 million barrels a day. The figure implies the group is complying with 80 percent of its production targets, the IEA said.

Brent crude oil for April settlement fell 16 cents, or 0.4 percent, to $44.93 a barrel on London’s ICE Futures Europe exchange.

Oil has dropped 69 percent from the record $147.27 a barrel reached on July 11 as the U.S., Europe and Japan face their first simultaneous recessions since the Second World War.