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London: The Organisation of Petroleum Exporting Countries yesterday cut its forecast for demand for its crude in the last three months of 2006 and said recent weakness in oil prices may persist.
Demand for Opec crude, known as the call on Opec, in the fourth quarter will average 28.69 million barrels per day, the 11-nation producer group said in its October report. The previous forecast was 28.86 million bpd.
Opec is set to meet on Thursday in Qatar to work out details of a 1-million-barrels-a-day cut in output. Oil has slid to below $60 a barrel from a peak of $78.40 in July, raising concern prices would fall further.
"Uncertainties about global economic prospects particularly in the US, slowing demand growth, rebounding non-Opec supply and high stock levels have triggered a strong bearish sentiment in the market," the report said.
"This has led to some concern that the downward momentum might persist, causing prices to overshoot and fall below levels justified by fundamentals."
Opec oil ministers have been debating whether to cut supply from actual production or from the group's notional formal output limit of 28 million bpd.
The 10 members bound by quotas, all except Iraq, pumped 27.6 million bpd in September, Opec said, citing secondary sources. That was down from 27.7 million bpd in August.
A cut from quotas would spare members such as Venezuela, Iran and Indonesia from lowering actual supply because they are struggling to pump their full entitlement under the current output limits.
Opec, source of more than a third of the world's oil, left its outlook for growth in global oil demand next year at 1.3 million bpd, the same as last month.
The International Energy Agency, an adviser to 26 industrialised nations, last week trimmed its 2007 oil demand growth forecast to 1.45 million bpd.
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