Speculation on OPEC Output Target Leads to Mixed Oil Prices

Oil prices have ended mixed in the midst of growing speculation over the possible action of OPEC on production targets when it gathers in Vienna this week.

In the meantime, the Energy Department of the United States reduced its forecast for the average price of West Texas Intermediate crude by $11 per barrel compared to its estimate last month because of slow growth of the global and US economy. With this reduction, WTI crude oil price for the remainder of 2012 is now expected to be $95 per barrel.

In the latest trading, light, sweet oil prices today for July delivery closed higher by 62 cents compared to the previous trading day, to end at $83.32 per barrel. The crude reached its lowest rate in eight months, at $81.07 per barrel, in the past trading days.

In London, Brent North Sea crude oil price for delivery in July fell by 86 cents to finish at $97.14 per barrel.

The upcoming ministerial meeting of OPEC could prompt further oil price drops as Saudi appears ready to go on with its plan to increase production quotas.

However, Venezuela wants a reduction in output to boost oil prices.

The cartel, consisting of 12 members which produces 33% of the crude supplies worldwide, did not change its recent outlook for the global oil demand this 2012 due to price instability and pressure on the world economy.

OPEC projected 88.69 million barrels daily for the demand this year. It is slightly higher from its past projection of 88.67 million barrels daily.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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