The Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy (DOE), on March 6th lowered its estimate for domestic oil product demand in the first and second quarters of 2001.
In its monthly short-term energy outlook, the EIA cut its estimate of oil product demand in the first quarter by 100,000 b/d to 19.63 million b/d and in the second quarter by 150,000 b/d to 19.48 million b/d.
The agency reported that overall U.S. oil demand would grow by 1.4 percent in 2001 to 19.76 million b/d, down from the 1.7 percent growth the group had forecast in February and much lower than the 2.5 percent growth rate projected in January.
The lower demand projections could weigh on OPEC’s decision of whether to cut production levels at the group’s upcoming meeting on March 16th, although the EIA report indicated that the cartel would not need to lower output to maintain its preferred oil price range of between $22 and $28 a barrel.
The agency said that: “EIA’s analysis indicates that the [cartel’s] February 1st quotas are sufficient to support OPEC’s desired price range.”
The EIA also lowered on March 6th its forecast for U.S. crude inventories at the end of the current quarter and at the close of the second quarter.
The agency cut its estimate for oil stocks at the end of the first quarter by 11 million barrels to 291 million barrels.
The DOE’s statistical arm also cut its projection for second quarter oil stocks by 9 million barrels to 296 million barrels.
© 2001 Mena Report (www.menareport.com)