World oil demand will contract sharply in 2009 as the global economic slowdown further erodes consumption, the International Energy Agency (IEA) said yesterday.
The Paris-based agency joined the ranks of numerous forecasters predicting a fall in global oil demand this year, revising its previous 2009 estimate by 940,000 barrels per day (bpd) to 85.3 million bpd – a 500,000 bpd year-on-year fall.
"Forecast global oil demand has been sharply revised down for 2009, following a reassessment of global economic prospects," the advisor to industrialised nations said in its monthly report.
"Global GDP growth has been roughly halved to 1.2 per cent, given the worsening outlook of the recession in most countries.
"The expected two-year contraction in oil demand will be the first since the early 1980s."
In its previous report, the IEA forecast global oil demand would fall in 2008, but recover in 2009, based on the resilience of emerging economies.
However, the global agency now sees Chinese oil demand growth at just 90,000 barrels per day in 2009, as its GDP growth is seen slowing to 6.5 per cent – the slowest rate in eight years.
Reflecting the speed of the world slowdown, the IEA has taken the step of pre-empting further revisions to global economic growth projections from the International Monetary Fund and other agencies, on which it bases its assumptions.
As demand drops amid the current worldwide economic slowdown, oil inventories in the Organisation for Economic Co-operation and Development (OECD) have remained at high levels.
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