OIL FALLS ON CLASHING DEMAND PROJECTIONS
Oil futures edged down on Tuesday as the International Energy Agency cut its crude demand growth outlook for the current year and 2018, writes The Wall Street Journal’s Christopher Alessi.
Brent crude, the global oil benchmark, fell 0.28% to $62.97 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.32% at $56.57 a barrel.
Global oil demand growth will be weaker than expected, falling by 100,000 barrels a day for 2017 and 2018 due to rising oil prices, the IEA said Tuesday in its closely watched monthly oil report.
The agency now expects demand to grow by 1.5 million barrels a day this year and 1.3 million barrels a day next year.
The data come a day after the Organization of the Petroleum Exporting Countries raised its forecasts for world oil demand growth for the same periods.
The cartel now expects consumer appetite for oil to rise by 1.53 million barrels a day in 2017 and 1.51 million barrels a day in 2018.
Although it is common to have variations in oil market projections, some analyst view the recent discrepancy between the IEA and OPEC as unusually large.
“It will create some volatility as the market is going to be split between those that think the IEA is too much on the bearish side,” said Olivier Jakob, managing director at oil consultancy Petromatrix, who views the IEA’s forecast as better linked to movements in crude prices.
A JOURNAL REPORT ON ENERGY: SHOULD THE U.S. LIMIT EXPORTS OF NATURAL GAS?
Experts debate whether the U.S. could reap more benefits from ramping up its exports of natural gas or LNG.
Some analysts say that overseas sales will create more jobs and help the U.S. compete globally with other exporters, such as Russia and Iran. But others warn that exposure to the fast-growing global market for liquefied natural gas could raise costs for natural-gas customers in the U.S.
GE TO FOCUS ON THREE KEY UNITS
General Electric Co.’s new leader plans to divest from its majority stake in Baker Hughes Inc., which went public in July after merging with GE’s oil and gas operations, The Wall Street Journal reports.
Instead Chief Executive John Flannery, who has been conducting a strategic review since he took over on Aug. 1, is expected to retain and focus on GE’s aviation, power and health-care divisions.
“The Boston-based company owns 63% of Baker Hughes, which had a market value of $40 billion based on Friday’s close. While it intends to exercise its option to exit Baker Hughes, the process hasn’t started and would be subject to some discussion between the companies’ boards. Under the current arrangement, GE is restricted from selling its stake for several years,” writes Thomas Gryta.