Debt Crisis Weighs on Oil

OPEC says Europe’s debt crisis and an oversupply of crude in the market are weighing heavily on oil demand in the second half of the year.

In its latest monthly report, released on Wednesday, the Organization of the Petroleum Exporting Countries held its world oil demand growth forecast largely unchanged at 940,000 barrels per day in 2010.

OPEC says U.S. oil demand will play a “major role” in crude consumption this year.

The bloc, which supplies almost 35 per cent of the world’s oil, says oil’s recent price drop appears linked to Europe’s debt crisis and a cooling in China’s economic growth.

It says any improvements seen so far in world oil demand have been “overwhelmed” by increased supply and persistent worries about the stability of the world’s economic recovery.

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