Broker's Notes: OPEC says world demand for oil will be lower than expected this year

Oil

The oil producing group Organization of the Petroleum Exporting Countries (OPEC) in its monthly report has said that world demand for OPEC's oil will be lower than expected this year and next due to a slowing economic recovery and higher supplies from non-member countries. It also left its forecasts for global growth in oil demand this year and next unchanged, but said the winding down of government measures to stimulate their economies could weigh on consumption in the next few months. The report underscores the cautious view on oil consumption taken by OPEC, whose demand growth estimates are lower than those of other forecasters such as the International Energy Agency, which represents consumers. OPEC said supplies from non-OPEC countries would rise by 920,000 bpd in 2010. That is 130,000 bpd more than expected last month, due to higher than expected supply from the United States and Britain

Sterling

Sterling weakened against the dollar on Thursday after weak UK trade data highlighted the fragility of the country's economic recovery. Official data showed Britain's goods trade gap widened to 8.667 billion pounds in July from 7.532 billion in June, wrong footing market expectations who had expected a broadly unchanged reading. GBP however gave a muted response after the Bank of England held interest rates at a record low 0.5 percent and announced no new quantitative easing measures, as widely expected.

Gold

Gold rebounded from lows on Thursday as bargain hunters resurfaced after prices struggled to revisit a lifetime high set in June, although firmer equities were likely to cap gains. The U.S. economy has shown "widespread signs" of slowing over recent weeks, the Federal Reserve said on Wednesday in a report suggesting that while the recovery has been faltering, the economy may skirt a second recession. Demand in India, the world's largest consumer, rises during the festive season, beginning with Raksha Bandhan in August and lasting through November with Dhanteras -- the single-biggest gold buying day.

Yen

The yen continued to trade strong at 15-year high against the dollar on Thursday as investors bet on the Japanese authorities are not yet ready to curb the currency's strength, while world stocks and crude prices rose. Japan's Finance Minister Yoshihiko Noda said the ministry was conducting simulations on forex intervention, though the Japanese currency hardly budged as the perception remains that Tokyo is unlikely to intervene until the U.S. currency falls near 80 yen. The dollar fell 0.2 percent to 83.71 yen on Thursday to near a 15-year low of 83.34 yen hit on Wednesday, and is down 9.9 percent against the Japanese currency this year which is buoyant on the back of global growth concerns.
 

Source: Richcomm Global, Dubai