OPEC expects lower oil demand in 2015 as oil prices slump

Brent crude traded around $80 a barrel on Thursday, near its lowest since 2010, after Organization of the Petroleum Exporting Countries (OPEC) said demand for its oil would fall in 2015, while Saudi Arabia remained silent about a possible cut in production.

In 2015, global oil demand from OPEC will drop to 29.20 million barrels per day (bpd), almost 1 million bpd less than its current production, the cartel said in its monthly report.

Brent crude slumped below $80 a barrel for the first time since 2010 on Wednesday before settling lower by US $1.29 at US $80.38.

Brent crude for December delivery, which expires on Thursday, shed another 34 cents to $80.04 as of 10:54 am.

"There are not many bullish factors to lift the market now," said Avtar Sandu, senior manager for commodities at Phillip Futures in Singapore. "But it's not a one-way street down. Those who have been selling want to take profits around this area."

US crude for December delivery was down 10 cents at US $77.08 a barrel.

The spread between the two benchmarks has narrowed more than $3 in the past week. The recent sharp decline in oil prices may cut investment in U.S. shale oil by 10 percent next year, the International Energy Agency (IEA) said.

Brent's premium to US crude narrowed to US $2.96 on Thursday from as much as US $6.42 last week.

ALL EYES ON SAUDI

Saudi Arabian Oil Minister Ali al-Naimi broke months of silence on Wednesday to reaffirm the kingdom's long-standing policy of seeking stable global markets, dismissing talk of a price war.

However, al-Naimi offered no insight on the Arabic state's response to slumping oil prices, leaving investors guessing about the outcome of OPEC's next meeting on November 27.

The noticeable lack of comment from Saudi Arabia, whihc is the world's biggest oil exporter, during the recent slide in oil prices may signal an involuntary change in the Saudi policy, according to Energy Aspects analyst Amrita Sen.

"The silence from Saudi Arabia is very, very damaging because the market tends to interpret and lets its imagination go wild," Sen said.

US crude stocks fell by 1.5 million barrels last week to 373 million, compared with analysts' expectations of an increase of 800,000 barrels, data from industry group the American Petroleum Institute showed.

(Reuters)