Reply #5: Oil Prices Drop on OPEC Demand Forecast [View All]

VIENNA, Austria - Oil prices slid Monday in response to lower demand forecasts and growing U.S. crude oil inventories.

With stocks plentiful and growth demand expectations down, some analysts suggested that prices would move downward over the coming months, despite supply concerns from violence-wracked Nigeria and from Iran, the focus of international concerns about its nuclear program.

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The Organization of Petroleum Exporting Countries lowered its forecast Friday for global oil demand growth in 2006 by 110,000 barrels a day. OPEC, which cited lower consumption in the U.S. and Asia, said its prediction comes after signs of larger oil inventories in the U.S., along with higher demand in January and February.

OPEC set oil demand growth for this year at 1.46 million barrels a day and demand for the year at 84.5 million barrels a day. This brings its estimate in line with recent revisions by agencies such as the International Energy Agency and the Energy Information Administration.

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