So who ya’ gonna’ believe on oil prices in 2010?
The economists at the International Energy Agency predict that oil demand will pick up sharply in 2010, rising about 1.5 million barrels a day from 2009 levels.
Big oil traders, who handle about 15% of the world’s oil output, are significantly less optimistic, according to the Financial Times. They say, the newspaper reports, that demand will pick up more slowly than expected in the first half of 2010. These companies say the increase will be more on the order of 1 million barrels a day.
And that won’t be enough to move oil prices currently stuck in a trading range of $70 to $80 a barrel.
The problem, as the oil traders see it, is that although demand from China and India will increase strongly, growth in demand from developed economies will be anemic.
OPEC (the Organization of Petroleum Exporting Countries) looks like it’s going with the traders.
The organization meets tomorrow in Angola amid speculation that it might increase production quotas in anticipation of a pick-up in oil demand in 2010. “No, absolutely not,” Saudi Arabia’s Oil Minister Ali al-Naimi told reporters. The consensus is to extend the current production limit of 24.8 million barrels a day. OPEC, which accounts for about 40% of global oil supply, left quotas unchanged for the third time when it met in September.
The organization’s next meeting is scheduled for March 17.
Oil for February delivery closed today down 71 cents a barrel to $73.71 in New York.