Oil prices steady on lower demand forecast

Crude oil prices moved little in early trade on Friday following a new estimate that cut estimated demand growth overall in 2006 but left estimates of oil supplies available this year from Organization of Oil Exporting Countries at previous levels.

The Paris-based International Energy Agency lowered its estimate of global oil demand growth this year from its previous level of 1.8 million barrels per day to 1.78 million barrels per day, while it stood by its previous estimate available supply from OPEC at 28.6 million barrels per day. The IEA also said that oil supply in January fell by 450,000, due mainly to weather disruptions and supply disruptions in Nigeria and Iraq. Globally, supply was down to 84.6 million barrels per day in January. According to the agency, OPEC had spare production capacity of only 1.4 million barrels per day, although it expects this capacity to grow by half a million barrels per day by mid-year. OPEC’s crude oil production capacity in January was 29.2 million barrels per day, down by 65,000 barrels per day.

Mid-morning trade in London saw Brent crude March contract crude oil down 10 cents to $60.65 per barrel, on top of a 31 cent decline on Thursday. In electronic trade on the New York Mercantile Exchange, March West Texas Intermediate crude was up 5 cents to $62.67 per barrel.