There has been a “steady decline” in global oil prices since mid-September because of a growth in oil supply and concern over the health of the global economy.
The Organisation for Petroleum Exporting Countries’ (OPEC) monthly report suggests a “pessimistic” outlook for future oil demand is outweighing geopolitical worries.
OPEC’s Reference Basket, the average price of the oil from OPEC countries, dropped in October for the first time since the record 13% plunge in June. It fell $2.31 (£1.45) to stand at $108.36 (£68.06) per barrel.
The Middle Eastern oil group’s report stated: “Expected weakness in the world economy is placing a considerable amount of uncertainty on the world oil demand forecast.”
The group forecasts a drop in demand from the USA following Hurricane Sandy while they say year-end cold weather might put pressure on heating oil not only in the US but in Europe as well.
Outside of OPEC, supply is forecast to increase by 0.9 million barrels per day (mb/d) in 2013, in line with the previous forecast. The US, Canada, South Sudan and Sudan, Brazil, Australia, Kazakhstan and Russia are expected to be the main contributors to next year’s growth, while Mexico, Norway and the UK are anticipated to see the largest decline, said the report.