01 October 2013 22:53 [Source: ICIS news]
PITTSBURGH (ICIS)--US demand for crude oil is declining by an estimated 1-2% a year, based on a slowdown in consumption, said an industry source on Tuesday at Pittsburgh Chemical Day.
In recent years, consumption of crude oil in home and industrial heating was considered low because of warmer-than-usual winters, with this past winter being a particular miserable time for oil consumption in heating applications, said Srivatsan Iyer, vice president of finance, planning and strategy at Braskem America.
Compounding the issue has been the trend of consumers not driving their vehicles as much and, as a result, not consuming as much fuel, Iyer added.
Current US domestic demand is estimated at 15m bbl/day, and that number is declining, said Iyer.
On the pricing front, pressures on OPEC countries will require crude oil prices to stay at the $90/bbl and above level.
There is, simultaneously, downward pressure by light tight oil (LTO), which is emerging as an alternative feedstock. However, LTO pressure to drop prices below $90/bbl would be short-lived on the back of civil unrest and supply disruptions in OPEC countries, Iyer said.
Lasting prices at levels of $120/bbl on the high side is also unlikely because of the downward pressure LTO poses, he said.
The 46th Annual Pittsburgh Chemical Day was held on Tuesday in Pittsburgh, Pennsylvania.
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