Structural Change In Demand Could Slow Recovery In Oil Prices



    CALGARY, June 4 /CNW/ - Oil demand will respond negatively to any
recession or economic downturn. However, major price spikes can engender
significant behavioural shifts that have a lasting effect on demand
(structural change). Oil demand is a creature of GDP and evidence suggests
that demand has been weakening over the past 4-5 years with rising price.
    The end of the global recession does not signal that oil demand will
return to prerecessionary levels. Demand for crude oil could be 6-10MM BOPD
lower and take 5-10 years to recover, post recession. This suggests that
falling crude oil supply may be kept in check by lower levels of demand,
placing a constraint on upward price movement, barring any return of massive
speculative activity.

    SBM Inc. is an independent Energy Advisory firm serving a variety of
clients in the oil and gas industry. Additional information about SBM Inc. is
available at: www.commoditycycle.com





For further information:

For further information: Gil Dawson, Managing Partner, at (403)
205-3511

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SBM INC.

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COMMODITYCYCLE.COM

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