There are two European theories on this. One comes from Chris Skrebowski, the editor of Petroleum Review, and the other from Barclays Bank PLC.
Barclays supports the idea that demand is increasing steadily from China, Saudi Arabia and India – in that order – and is expected to keep going. Demand in 2008 will grow 1.7%, up from 1.2% in 2007. They don’t believe that economic weakness in the United States and possibly in the European Union will be enough to dent the growth, either.
Jim Kingsdale for Seeking Alpha reports that another theory from Skrebowski reinforces Barclays point-of-view, where we now have an oil world where the impact of high oil prices is only really felt in the Organisation for Economic Co-Operation and Development (OECD) countries, where demand is already falling.
Meanwhile, OPEC reports that markets are well supplied, but not everyone agrees. Are OPEC countries in a position to increase exports or are they covering an inability to increase supplies by reporting that action is not necessary?
We’ll have to wait for the answer until fall, as OPEC has adjourned until September.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.