OPEC’s 2006 demand estimate

What a press release… you
can’t get any more words into this OPEC report and shamelessly say less.

What were they trying to convey?

This is yesterday’s press release:

OPEC raises ‘call’ on its own oil for 2006 to 28.62 mil b/d London (Platts)–17May2006

OPEC cut its forecast for world oil demand growth this year on Wednesday,saying that high prices were contributing to a slowdown in incremental demand in developed countries.

In its latest monthly oil market report, OPEC also
cut its forecast for non-OPEC oil production this year, as a result
raising the  ‘call’ on its own crude output.

OPEC now expects world oil demand to average 84.6
million b/d in 2006, up 1.38 million b/d from 83.22 million b/d in
2005. The cartel had previously been predicting demand growth of 1.43
million b/d this year.

"The largest share of the increase in world oil
demand growth will come mainly from the developing world, mostly due to
the strong economic growth," the OPEC report said. "However, the high
oil prices and the removal of the fuel subsidies are expected to
negatively impact oil demand, especially in South-East Asia," it added.

On the supply side, OPEC now expects non-OPEC supply
to grow by 1.34 million b/d to reach an average of 51.48 million b/d in
2006, down from a previous projection of 51.54 million b/d.

The adjustment to non-OPEC forecasts reflects first
quarter data from a number of countries, as well as lower than expected
growth in Canada, Angola and Sudan, OPEC said.

The ‘call’ on OPEC crude resulting from the
difference between expected demand and non-OPEC supply is seen
averaging 28.62 million b/d this year, OPEC said, up from a previous
projection of 28.5 million b/d.

This call is well below the cartel’s current output,
which it reported as 29.798 million b/d in April according to data
based on secondary sources, up 164,000 b/d from 29.634 million b/d in
March.

So, what are they saying?

OPEC’s estimated 2006 world demand for oil drops by 50,000 barrels per day.  At an estimated daily demand of 84.6 million b/d, 50,000 b/d is a drop in the bucket; taking less time to gush this oil than it takes me to zip my morning coffee: 51 seconds.

Big deal… I wonder what the accepted error in their prediction is.

OPEC is ready to point out
that non OPEC members will not be able to deliver as promised, and that
they will gallantly fill the gap; in effect, exceeding their previous
OPEC yearly supply, it’s call, to 28.62 million b/d.

Bottom line, if you have nothing to say, shut up.