According to the IEA world oil demand growth is expected to slow to an average of 86.3 mln barrels per day during 2009 down from earlier forecasts that approached 87 mln barrels per day.
Oil Supply is expected to grow at an annual rate of 1.2% and expected to hit 87 mln bpd in 2009, which is less than the previous forecast for global supply growth of 1.6% per annum.
However going forward demand from developed countries is expected to continue to contract at the average rate of 200,000 barrels per day that implies the full impact of peak oil will be put off for as long as another 5 years.
Price Overshoot to 20 USD? Nonsense.
Mechelany, an asset manager from Bank of China said that "Prices tend to overshoot both on the upside and on the downside. In the context of the latest movement $20 is only one standard deviation from $35, which I consider to be the long-term equilibrium price," said Mechelany from Bank of China. Its like Merrill predicting 25 dollar oil. If they had forecasted the oil declined maybe they didn`t have to sell themselves to Bank of America.
I have to say that these projections seems like those made at the top that estimated oil at 250 USD. I really don`t think oil will go into the low thirties, much less to 20. Now, the consensus projections points to 53 USD oil in 2009. But the oil market is active and opportunities on both side of the market are plentiful.
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