IEA Reduces Oil Targets ... It's Almost Time to Buy

Crude oil is pulling back this morning after the International Energy Agency cut its global demand forecast for the third consecutive month. As Bloomberg says ...

The energy adviser to 26 nations reduced its projection for world oil demand this year by 80,000 barrels a day. Demand will expand 1.1 percent to 84.5 million barrels a day, down from an earlier forecast of 1.2 percent, the IEA said in a monthly report. Demand will drop because China, the world's third-largest oil importer, will have slower gains in gasoline use, the IEA said.

Looking down the road, the IEA expects more of the same...

The Paris-based IEA also reduced its 2007 world consumption estimate by 80,000 barrels a day and cut next year's forecast for oil demand from the Organization of Petroleum Exporting Counties, the so-called ``call on OPEC,'' to 28.3 million barrels a day. Last month it estimated that 2007 demand from the 11-nation group would be 28.5 million barrels a day..

Well, considering the IEA's piss-poor track record on predicting these things, I'm actually feeling rather bullish. You know what else makes me feel bullish? This chart of crude oil...

If crude oil closes back over $62 (roughly) that would be bullish. The bottom oscillator on the chart is RSI, a measure of momentum. It's also rising -- also bullish.

We'll see how crude looks on Monday. Have a great weekend.

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