Oil prices were mostly unchanged on Friday despite a report released today that of lower consumer confidence which triggered speculation that U.S. demand will fall.
The Reuters/University of Michigan Consumer sentiment index fell the most since 1992 from 69.6 in February compared to 78.4 in January. The data raised fears among investors who speculate U.S. demand for fuels will decrease. The U.S. consumes a quarter of world's oil.
Increasing demand concerns, the Organization of Petroleum Exporting Countries today lowered its world oil demand forecast for the current year.
The organization, which provides nearly 40 percent of total world's crude, released its monthly oil market report today.
In 2008, world oil demand is forecast to grow by 1.2 million b/d to average just under 87 mb/d, representing a slight downward revision from the previous estimate, the report stated.
OPEC commented that some of the reasons that consumption of oil has fallen include the slowing world economy, warm winter in the Pacific and disruptions in China due to winter's weather. In addition, the international body forecasted world oil demand for the first quarter will grow by 1.4 million b/d to an average of 87.2 million b/d according to the report.
Crude oil for March delivery rose 0.04 cents or 0.04 percent to $95.50 a barrel on New York's Mercantile Exchange. Brent crude for delivery in three months fell 0.53 cents or 0.56 percent to $94.96 a barrel on London's ICE Futures Exchange.
Adding to warnings of a global demand slowdown, the International Energy Agency reduced the annual growth rate from 2.3 percent to 1.9 percent in a report released on February 13 which covered last month's oil market.
The agency said that due to the slowing economy in the United States, demand in 2008 will drop 200,000 barrels to 87.6 million barrels a day.
The reports showed a drop in demand for oil causing it to erase earlier gains.
Separately, Venezuela stopped sending crude exports to Exxon Mobile Corp. this week after $12 billion of its assets were frozen as a result of a legal process. Exxon Mobil Corp. is fighting a billion dollar project nationalized by the South American nation.
Despite Venezuela's action, U.S. Energy Secretary Sam Bodman said yesterday he did not expect Exxon to have difficulties in replacing oil supplies from Venezuela, according to Reuters. He added that the nation's Strategic Petroleum Reserve would be available if needed.