OPEC Lowers Forecast on Demand for Its Own Crude

The Organization of Petroleum Exporting Countries (OPEC) released its March Oil Market Report this morning. The cartel did not change its forecast for global demand growth of 800,000 barrels a day to a total of 89.7 million barrels a day.

What did change was OPEC's estimate for demand on its own crude. The cartel reported that 2012 demand on OPEC fell by 100,000 barrels a day, and that the current forecast calls for a decline of 400,000 barrels a day in 2013, for a total demand of 29.7 million barrels a day. That is 100,000 barrels a day less than OPEC forecast last month. The cartel, which does not release its own figures on OPEC production, said that total February production based on external sources totaled 30.31 million barrels a day from the OPEC members

Non-OPEC supply is expected to grow by 1 million barrels a day in 2013, up 100,000 barrels from last month's report. The increase comes from revised forecasts for North America, Mexico, Syria and North and South Sudan.

OPEC's average basket price rose $3.47 a barrel in February to $112.75 a barrel. At the end of the month the price had dropped to $106.96 a barrel. The cartel notes a "bullish U.S. gasoline market" as one of the reasons for the jump in February prices. Now that gasoline supplies to the eastern U.S. have adjusted to the unexpected January closing of Hess Corp.'s (NYSE: HES) 50,000 barrel a day New Jersey refinery, gasoline prices have moderated a bit and the futures market for gasoline has stabilized.

Filed under: 24/7 Wall St. Wire, International Markets, Oil & Gas Tagged: HES