Economic weakness drags oil demand prospects

The price of light crude oil, delivered in August by the New York Mercantile Exchange, fell below $60 a barrel, with the international oil price falling by more than 10% per cent since July, as investors lacked confidence in the outlook for crude oil and recent weakness in international oil prices. 　　With global economic fundamentals still weak, oil prices are likely to continue to oscillate in the short term without a lot of positive macro data, and seek direction in the adjustment. Economic weakness has hit demand this year, signs of economic recovery have increased and investor confidence has soared, pushing oil prices to rebound. 　　But recent economic data have been so bearish that investors are sceptical about the prospects for economic recovery, leading to subtle shifts in the fragile market mentality. Data released earlier showed that the U.S. unemployment rate reached 9 in June. 5%, 26-year highs. The European Union also announced that the euro zone's unemployment rate rose to 9 in May. 5%, the highest level since May 1999. 　　The sharp rise in unemployment rates in Europe and the United States suggests that the global economy has not recovered as a whole as a result of massive government bailouts, and that there are still downside risks to the recovery. With the global economy likely to be difficult to recover quickly, major institutions have cut their oil demand forecasts.　　OPEC has said it has provided a basis for cutting new investments as the economy is weak and demand is sluggish, with global oil demand or years to recover from 2009 of weakness. OPEC said in its 2009 global Oil Outlook report that until 2013, global demand for crude oil could not return to the pre-crisis level of the 2008 economic crisis. "Oil demand will fall in the short to medium term, which will lead to a rise in overall spare capacity," said Badri, secretary-general of the Organization. "OPEC expects global oil demand to grow at a much slower pace than previously estimated in the medium to long term, but supply will also decrease." The group also expects global oil day demand to reach 105.6 million barrels by 2030, and 7.7 million barrels more than previously estimated. In the medium term, oil consumption this year is expected to drop from 85.6 million barrels a year to 84.2 million barrels and back to 87.9 million barrels in 2013. 　　The report says slow demand growth and a sharp drop in oil prices since last year's all-time highs mean OPEC needs to cut spending on new oil fields. Signs of a strong recovery in oil demand have receded sharply in recent days, with a global daily demand of 83.8 million barrels a year, down 2 from last year, according to the International Energy Agency's latest monthly report, released 10th. 9%, unchanged from previous expectations. But the group also predicts that global oil demand will likely be 1 in 2010, driven by rising consumer growth. 　　7% bounce, up to 85.2 million barrels. Short-term oil prices may continue to shake off the backdrop of weak economies, and money into commodities markets is continuing to retreat. U.S. commodity market hedge funds and speculators reduced their long positions by as much as 30% in the one months ended June 30, according to the US Commodity Futures Trading Commission, which was last MarchTo fund the first consecutive reduction of long positions. Analysts pointed out that, in the early support of the rapid rise in oil prices, the fundamentals of the gradual retreat, investors ' recent attention has returned to the supply and demand relationship, the current view, oil demand in the year is difficult to see a clear recovery. 　　With fundamentals still weak, oil prices are likely to continue to oscillate in the short term. Tony Hayward, BP's chief executive, said the international oil price would be somewhere between $60 and $90 a barrel in the next few years. Oil producers need to keep oil prices above $60 a barrel to balance their balance sheets, says Hayward, while oil-consuming countries can withstand a maximum price of about $90 trillion. He said most OPEC members needed oil prices at least 60-70 dollars to ensure they were able to invest in crude oil production. If the price is not guaranteed, they will first cut future capacity. On the consumer side, their trading activity did not seem to change much before the oil price rose to $100, Hayward added. 　　The highest price they can tolerate is 90 dollars a barrel. UBS raised oil prices in 2009 and 2010 to $70 a barrel. UBS said the current fundamentals remain weak and demand is sluggish and inventories are large, and OPEC's spare capacity is also at a significant high.