Oil News

IEA: Oil Demand To Cool

According to Reuters, the IEA projects demand to cool near term, as Chinese demand actually slowed in the first two months of 2005, and interest rates in the U.S. rose. The IEA cautioned it was too soon to draw definitive conclusions and that economic growth in China remained strong, but left its 2005 projection of Chinese oil consumption at 500,000 barrels per day.

Crude Moves Up

Crude prices inched up to $53.89/bbl.

"The hedge funds have become if not absolutely bearish at least feeling that the highs are behind us and will have to wait until the third quarter to take prices back toward their $60 (a barrel) target," said analyst Deborah White of SG Securities in Paris.

Nigerian oil workers declined to strike, also easing fears of renewed tightness.

CNOOC Buys Into Canadian Oil Sands

Chinese oil company CNOOC "has acquired a 16.69% stake in privately-owned Canada-based MEG Energy Corp. for C$150 million", according to Dow Jones news services.

"It might ring some alarm bells in some political circles in the U.S. But most of Canada's oil exports will still go the U.S. It's logical due to the proximity of the market. U.S. will not lose a large chunk of its supplies," said Shum.

Economists Revising Effects Of High Oil Prices On U.S.

Despite the Macroblog's optimism (hat tip: Knowledge Problem), it appears a number of economists are negatively revising their growth estimates for 2005. Nobody's talking about the R-word -- recession -- just yet.

What's feeding the pessimism compared with last year is that oil prices aren't expected to retreat after breaching $50 a barrel in February, as they did after passing that mark in October of last year. Monday, light, sweet crude for May delivery settled 39 cents higher at $53.71. Gasoline has exceeded $2 a gallon for five straight weeks, climbing to an all-time high; the Energy Department predicts a record average of $2.28 for regular gasoline in the summer.