US oil price gains but London lower

Oil prices gained in New York on Tuesday but fell in London after OPEC kept its global demand estimate steady but increased its estimate of the supplies added to the market from non-cartel producers. New York's main contract, West Texas Intermediate (WTI) crude for delivery in April, added 48 cents on Monday's price to end at US$92.54 a barrel. But in London, Brent North Sea crude for April lost 57 cents to US$109.65 a barrel. An uncertain picture on global demand growth continued to overhang the market, analysts said, especially for major energy consumers China and the United States. OPEC's monthly market report held its 2013 global crude demand forecast unchanged at 89.7 million barrels per day, up 0.8 million from 2012. US demand was expected to be flat after two years of decline and Japanese consumption roughly at the same level as well. But the cartel, which accounts for around 35 per cent of world supply, raised its expectation of production growth by non-OPEC suppliers in 2013 by 11 per cent to 1.0 million barrels a day, with the growth mainly coming from North America. "As in the previous year, US oil supply in 2013 is expected to achieve the highest growth among all non-OPEC countries," the report said. That suggested more downward pressure on all prices as exporters fight for market share. The report put OPEC production at 30.3 million barrels a day in February. In addition, risks remain to demand, including eurozone instability, the impact of a large budget cut in the United States and any "sudden" decision by the Japanese government to reopen nuclear plants that were shut down after the Fukushima disaster two years ago, the cartel said. Meanwhile the US Energy Information Agency, in its short-term energy outlook report Tuesday, lowered its forecast for the average WTI price this year slightly to US$91.92 a barrel while sticking to its forecast that the price gap between WTI and Brent would narrow to US$9 a barrel by 2014. It projected the Brent price would fall from an average of US$112 last year to US$108 in 2013 and US$101 in 2014, while "reflecting the increasing supply of liquid fuels from non-OPEC countries." Meanwhile WTI will stick around US$92 a barrel through 2014, it said.