Oil snapped three days of gains after International Monetary Fund Managing Director Dominique Strauss-Kahn said on April 23, 2009 that the economic crisis is far from over. OPEC will cut crude oil shipments by 0.6% in the four weeks ending May 9, 2009 as production cuts falter, said Oil Movements, the Halifax, England- based tanker-tracker.
“The international economy remains fundamentally weak and oil consumption is weak,” said David Moore, the commodity strategist at Commonwealth Bank of Australia in Sydney. “For the near term, oil prices will move moderately lower to around $45 a barrel.”
Oil has dropped 67% from a record $147.27 a barrel reached on July 11, 2008 because of reduced global demand for crude.
“Until there is firm evidence that the stimulus package is working and the economy is growing, we will keep waffling around here,” said John Kilduff, senior vice president of energy at MF Global Inc. in New York.
Fuel Demand
Total daily fuel demand in the US averaged 18.5 million barrels a day in the four weeks ended April 17, 2009 down 6.5%, compared from previous year, as per the department.
OPEC will load about 22.27 million barrels a day in the four weeks ending May 9, 2009 down 0.6% from 22.4 million a day in the month ended April 11, 2009 Oil Movements said. In the month to May 2, 2009 it cut by 2.5%.
OPEC has finished about 80% of the 4.2 million barrels of daily production cuts it announced in 2008 to take affect in 2009, as per Oil Movements. That compliance rate is unchanged from the last four reports, indicating that OPEC is not getting closer to its target. OPEC’s shipments are at a five-year low.
