Opec to keep output unchanged
There were also renewed demonstrations over fuel prices, including protests from French truck drivers that caused widespread disruption around Paris and a sit-in at the Madrid stock exchange to protest against the WPC.
The US Energy Information Administration on Monday revised downward April oil demand by 863,000 barrels per day to 19.77 million bpd – 3.9 per cent below levels a year ago – as surging fuel costs eroded demand in the world’s top consumer.
The revision showed that demand this April was the lowest for the month since April 2002, and that was even before prices scaled to new highs in June.
“This revision of the US oil demand for April has certainly put pressure on crude futures. This is demand destruction before our very eyes,” Phil Flynn of Alaron Trading, said.
“This is a huge revision, and it happened when [fuel] prices were still lower, so you can expect that there could be more future downgrades in demand data.”
One of the main points of contention at the WPC was the role of speculators who have been blamed by producer countries for the doubling of crude prices over the last 12 months.
Western oil chiefs, backing the view of governments in consumer countries, insisted on Monday that speculators were the wrong target and that the failure of supply to match rising demand was the real cause.
“This is a fundamental thing. It’s not about speculation,” Tony Hayward, chief executive of British oil group BP, told delegates, adding that it was a “myth” that speculators were to blame.
“Investors is a better word than speculators. They are investing in the oil market because they believe prices will go up.”
Jeroen van der Veer, head of British-Dutch oil group Shell, also said blaming speculators was wrong, adding that the role of the market was “the translation of things that might happen in the future into the price”.
More than 3,000 delegates, including leading corporate and political figures, were attending the World Petroleum Congress, which runs from Monday to Thursday after an official opening reception on Sunday.