May 13 (Bloomberg) -- Slower global economic growth won'thalt rising oil prices because supply is failing to keep up withdemand, according to Jochen Hitzfeld, a Munich-based economist atUniCredit SpA. ``Since the fourth quarter of 2007, demand has been roughly2 million barrels per day above supply, which is stagnating atclose to 85 mbpd,'' Hitzfeld wrote in a research report today.``The falloff in demand for oil because of the global economicslowdown will trigger only a slight decline in this primarydeficit. We anticipate a drastic inventory rundown.'' The chart of the day tracks the increase in crude-oilfutures traded on the New York Mercantile Exchange, showing theaverage prices of $74 for 2007 and $103 so far this year ingreen. Hitzfeld today raised his 2008 forecast to $115 from $100previously, and his 2009 forecast to $125 from $105. Thosepredictions are shown in red. ``Analysis of the 230 most important new production projectsshows that even if all projects can be realized as planned, therewill be a supply/demand gap of 12.5 mbpd, or close to 15 percentof current demand, in coming years,'' Hitzfeld wrote. ``Withoutcounter-measures, this will undoubtedly trigger a supply crunchand escalating oil prices.''
Bullish talk about oil
May 13 (Bloomberg) -- Slower global economic growth won'thalt rising oil prices because supply is failing to keep up withdemand, according to Jochen Hitzfeld, a Munich-based economist atUniCredit SpA. ``Since the fourth quarter of 2007, demand has been roughly2 million barrels per day above supply, which is stagnating atclose to 85 mbpd,'' Hitzfeld wrote in a research report today.``The falloff in demand for oil because of the global economicslowdown will trigger only a slight decline in this primarydeficit. We anticipate a drastic inventory rundown.'' The chart of the day tracks the increase in crude-oilfutures traded on the New York Mercantile Exchange, showing theaverage prices of $74 for 2007 and $103 so far this year ingreen. Hitzfeld today raised his 2008 forecast to $115 from $100previously, and his 2009 forecast to $125 from $105. Thosepredictions are shown in red. ``Analysis of the 230 most important new production projectsshows that even if all projects can be realized as planned, therewill be a supply/demand gap of 12.5 mbpd, or close to 15 percentof current demand, in coming years,'' Hitzfeld wrote. ``Withoutcounter-measures, this will undoubtedly trigger a supply crunchand escalating oil prices.''