Stronger-than-expected global oil demand should help support crude prices at around $55-$60 a barrel in the next two months despite signs of a growing oversupply in the U.S., a senior Gulf OPEC delegate told Reuters on Tuesday.
“Global demand is definitely growing much stronger than expected. In December, January, and especially February it was beyond what forecasts anticipated,” the delegate said.
The comments come days after forecasts of U.S. crude build potentially pushing prices to as low as $20-$30 a barrel.
Low oil prices may have encouraged demand to pick up particularly in the United States but also in Asia, the Gulf delegate, who declined to be identified, added.
Oil prices are expected to fluctuate around $55-$60 a barrel through April, when they may come under pressure because of seasonal refinery maintenance and rising stocks in the United States, the Gulf OPEC delegate said.
“There are still uncertainties, prices will stay fluctuating around 55-60 dollars,” the delegate said.
“If you look at the U.S., it’s really tough, stockpiling is rising. But if you look at the international market, stocks are on the higher side but they are still within the five-year average.”
The Gulf OPEC delegate said rising production reflects increasing exports to meet global demand as well as growing local needs.
“Increased production is due to two reasons: sales for the international market reflecting stronger demand from customers, not anything else, and local needs with the new refineries online,” the Gulf delegate said.
