CRUDE OIL futures fell below $34 a barrel in New York on forecasts that faltering global economic growth will drive down fuel consumption for a second year.
Goldman Sachs, which expects demand to fall by about 1.6 million barrels a day this year, says prices will rebound after slumping to about $30 a barrel. That’s more than three times the demand drop forecast by the International Energy Agency.
The Organisation of Petroleum Exporting Countries may have to cut output again should prices fall further, Algerian oil minister Chakib Khelil said over the weekend.
“Demand is falling faster than oil producers are cutting production,” said Thina Saltvedt, an oil analyst at Nordea Bank AB in Oslo.
“As long as Opec is one step behind, prices will continue to fall.”
Crude oil for February delivery fell as low as $33.89 a barrel in electronic trading on the New York Mercantile Exchange, and was down $1.89 at $34.62 at one stage. There was no floor trading in New York yesterday because of the Martin Luther King Day holiday. – (Bloomberg)
