Nigeria's junior Oil Minister, Edmund Daukoru said Tuesday he isn't concerned by recent forecasts that global oil demand growth won't be as strong later this year and in 2006 as previously expected. "I am really not too worried by all of this. What matters is there is still some tightness in the system and prices remain high," Daukoru said in a telephone interview with Dow Jones Newswires.
Daukoru's comments follow a report Monday in which the Organization of Petroleum Exporting Countries cut its outlook for world oil demand this year amid predictions of slowing demand in 2006. Weaker-than-expected crude demand from China saw OPEC cut 150,000 barrels a day from its forecast for oil demand growth in 2005. It also slashed its "call" on OPEC for this year by 260,000 b/d to 28.9 million b/d. But Daukoru said he isn't worried by the numbers. "Anything less than a 500,000 b/d cut in the call on OPEC is not a worry," he said.
However, if U.S. oil prices fall to $52.00-$53.00 a barrel, then the group would need to consider cutting back its official ceiling, he said. "We really need to adopt a wait and see approach for now, but if prices fall to the $52.00-$53.00/bbl range then we need to consider our options," he said.
Tuesday, the U.S. oil price hovered close to $57.00/bbl. Last week, the Paris-based International Energy Agency also offered a bearish outlook for oil markets when it cut its expectations for world oil demand growth on slower-than expected Chinese demand.
Others within OPEC also seemed unfazed Tuesday by the recent revisions. Iran's governor to OPEC, Hossein Kazempour Ardebili said "the revisions aren't surprising compared to the robust growth seen in 2004." Another senior OPEC delegate, meanwhile, said he was skeptical of the recent downgrades to oil demand growth outlook. He said even though the IEA's current call on OPEC is around 28 million b/d and the group has been pumping near 30 million b/d for past half year, oil prices are still close to $60/bbl.
