Oil was mixed in Asia on Friday after the International Energy Agency trimmed its forecast for growth in global demand and the price of oil fell to near $92 a barrel , dragged down by a combination of lukewarm forecasts for demand and ample supplies.
The Paris-based IEA on Thursday projected that global oil demand would grow by 795,000 barrels per day to a total of 90.6 million barrels a day in 2013. The IEA report was published a day after the Organization of the Petroleum Exporting Countries (OPEC) also lowered its forecast.
New York’s main contract, light sweet crude for delivery in May, dropped 32 cents to $93.19 a barrel in the afternoon and Brent North Sea crude for May delivery gained a cent to $104.28 in the afternoon.
“A lowered IEA forecast is definitely having an impact on oil prices,” Kelly Teoh, market strategist at IG Markets here said. “The market is very sensitive to any type of announcement nowadays, with traders being geared onto data.”
The figure is slightly lower than its previous outlook, as a decline in European demand partially offset growth elsewhere, the agency said.
Brent crude, which sets the price of crude used by many U.S. refineries to make gasoline, was down $1.44 to $102.83 a barrel on the ICE Futures exchange in London. Brent has dropped about 12% in the past two months amid Europe’s ongoing financial crisis, increased supplies and tepid forecasts for demand.
“Concerns about European demand continue to weigh on the oil price,” said Michael Hewson of CMC Markets. “U.S. inventories at their highest levels in years and the IEA lowering its forecasts for oil demand are pushing prices lower.”
Experts, however, said they expected global demand for crude to strengthen in the second half of the year, leading to higher prices.
They forecast global oil demand this year to exceed 2012 levels by 500,000 barrels a day during the first half of the year and by 1.9 million barrels a day between July and December.