Oil prices yesterday fell in Asia after the OPEC oil cartel slashed its longer-term global demand outlook, while a stronger US dollar also weighed, analysts said.
The benchmark US futures contract, West Texas Intermediate for December delivery, dropped US$0.36 to US$77.55, while Brent crude for December eased US$0.52 to US$82.34 in afternoon trade.
OPEC on Thursday estimated in its annual world outlook that demand for its crude would fall from just above 30 million barrels per day last year to 28.2 million in 2017, before starting to rise again.
OPEC said the US and Canada are the primary drivers of non-OPEC output growth, in part due to shale-oil production. Singapore’s United Overseas Bank said “US and global crude prices resumed its decline” after the release of the report, adding to heavy losses earlier this week owing to price cuts by Saudi Arabia.
Prices were also under pressure from the stronger US dollar.
The US dollar on Thursday afternoon bought ¥115.31 in late-morning Asian trade, from ¥115.16 in New York. The greenback has surged against the yen since Friday last week, when the Bank of Japan ramped up its stimulus program.
A stronger greenback makes US dollar-priced commodities like oil more expensive for buyers using weaker currencies, which in turn tends to hit demand and prices.
Meanwhile, Venezuela would maintain oil production for next year at the current level of 3 million barrels a day despite falling oil prices, the head of state oil company Petroleos de Venezuela SA (PDVSA) said on Thursday.
PDVSA vice president for exploration and development Eulogio Del Pino said the company plans to “maintain our production and develop our capacity to react to any scenario.”
Venezuelan oil prices last week hit US$75.79 a barrel, after a sharp two-month fall in prices that has added to the OPEC member’s deepening economic woes.
With the world’s largest oil reserves, Venezuela has said it needs oil to sell at US$100 a barrel to cover its budgetary requirements, although Venezuelan President Nicolas Maduro recently said it would be fine with oil at US$80 a barrel.
Del Pino said crude exports, which account for 96 percent of the nation’s hard currency revenues, were up slightly at 2.5 million barrels a day.
The Venezuelan government puts its production at 3 million barrels a day, although OPEC said that as of July it was producing an average 2.83 million barrels a day.
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