OPEC Cuts Oil Demand Forecast; Buyers Shun Heavy Oil

[phantom power]

(Bloomberg) -- The Organization of Petroleum Exporting Countries cut its 2008 global oil demand forecast for a second time in three months as producers report difficulties selling ``heavy'' crude grades.

(...)

A lack of investment in refinery units that make diesel has increased demand for light oils at the expense of heavy grades, OPEC said today.

The mismatch ``has left refiners with little option but to increase light grade throughputs, resulting in a widening spread between light and heavy crude,'' the report said.

(...)

The price spread between Iranian heavy crude and West Texas Intermediate, the benchmark light crude in North America, has quadrupled to $10.99 a barrel, compared with a spread of $2.65 a barrel at the same time last year, according to Bloomberg data.

http://www.bloomberg.com/apps/news?pid=20601072&sid=ay3B20MjKdro&refer=energy

[bhikkhu]

1. So when the Sauds say "demand is weak" and decline to open the spigots

we can read between the lines: nobody really wants heavy sulfurous crude, but that is all OPEC has as far as "spare capacity".

[phantom power]

2. That is how I read it. They're giving us Truthiness.