OPEC Sees Little Support for Current Prices

OPEC Sees Little Support for Current Prices

In its monthly market report, the Organization of Petroleum Exporting Countries said oil’s recent volatility — the price for a barrel has swung back and forth in a $10 range over the past week alone — “reconfirms the view that current price levels do not reflect supply and demand realities.”

Looking ahead to the second half of the year, the cartel said: “A review of the prospects … also shows little support for prices to remain at current levels.”

OPEC lowered its 2008 global demand forecast, saying it now expects demand to increase by 1.28 percent to an average of 86.9 million barrels per day, down from a previous forecast of 1.35 percent.

OPEC also offered its own thoughts on high oil prices: “The start of the Atlantic hurricane season, low natural gas storage levels and speculative price projections by investment banks revived market bullishness. The fear premium was boosted by the threat of conflict in the Middle East triggering another wave of fund inflows in the futures market.”

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