OPEC’s forecast for oil demand in the coming year is a great "one the one hand, but on the other hand" exercises in analsys.

According to Reuters: "demand for its crude would average 30.4 million bpd this year, up from its previous forecast of 30.25 million bpd". That is, of course, unless global economic weakness drives demand down.

The price of oil is still likely to rise. The International Energy Agency says that inventories in industrial nations could hit their lowest level in 10 years. That, and even the smallest interruption in supply from somewhere like Iran, could move oil prices back over $60 and perhaps to $70.

If supply is tight, it won’t take much.

Douglas A. McIntyre