Envoys in Brussels, Canberra, Lisbon, New Delhi and the permanent mission to the United Nations in New York ordered to return immediately to Dhaka
Moody’s said on Friday that while its global economic outlook for next year continues to be one of a “slow and painful” rebound, world oil consumption will resume growth, fuelled by buoyant demand in emerging economies, led by China.
It estimated that a barrel of West Texas Intermediate crude oil will average $75 in 2010, up from an earlier estimated of $50 a barrel. In 2011, this will go up to $80 a barrel, up from a previous estimate of $60.
Natural gas prices is seen averaging $4.50 per million British thermal units for 2010, $5 in 2011, and $5.50 in 2012.
The credit ratings agency noted that global oil demand is perking up again after a decline that began in the second quarter of 2008. It cited a report in November by the International Energy Agency that consumption, paced by China, is exceeding expectations, while demand contraction is easing in nations belonging to the Oveseas Economic Cooperation and Development, or OECD.
It said the OECD has revised upwards its global daily oil demand forecast by 210,000 barrels a day for 2009, and by 140,000 barrels for 2010. OECD data showed that demand is on tract to show year-on-year growth in the fourth quarter, and is now seen averaging at 84.8 million barrels daily.
Crude oil prices rose to their highest level in more than a year in October, reaching more than $81 per barrel, before settling in the $75-$80 a barrel in November.
“Moody’s believes that the resumption of growth in global oil consumption, fuelled by buoyant demand in developing economies and modestly improving conditions in OECD countries, should help support oil prices over the next 12 months,” said Francois Lauras, vice president at Moody’s corporate finance group.
However, there are see several factors on both the supply and demand sides that are likely to constrain any further rally in the near term, added Lauras.
He said that prices will be tempered by continuing high inventories of natural gas, crude oil and refined products.
For one, the Organisation of Petroleum Exporting Countries’ spare capacity is currently estimated to be more than six million barrels a day, while quota compliance has waned in recent months. Member countries have exceeded their quotas by about 1.6 million barrels daily in October.
Saudi Arabia, the world’s largest oil producer and exporter, and which accounts for 90 per cent of Opec’s spare capacity, keeps a third of its capacity shutdown.
“While the Saudis are arguably wary of derailing the nascent recovery in the world’s economy, their decision to bring additional oil to the market, will undoubtedly influence near-term oil price movements, as well as the outlook for global economic growth,” said Moody’s.
IEA data also showed that global oil supply picked up in October, as Opec production rose to its highest level since January, while non-Opec supply was bolstered by higher production in the US Gulf of Mexico, Norway and Russia.
In contrast, recent US inventory data has failed to show any material improvement in demand conditions. Demand in the world’s largest oil consummer is still weak because of lingering doubts about the pace of economic recovery. This has lead many refineries to shut down or scale back.
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