IEA again cuts 2009 oil demand forecast

By OGJ editors
HOUSTON, Feb. 11 -- In its latest monthly Oil Market Report, the International Energy Agency has revised downward its outlook for 2009 worldwide oil demand.

The Paris-based agency now sees worldwide demand averaging 84.7 million b/d, down 570,000 b/d from its previous projection. The new forecast would mean that demand will decline 1 million b/d from 2008.

The revised outlook puts average 2009 oil demand in the Organization for Economic Cooperation and Development at 46 million b/d, which is 340,000 b/d lower than in IEA's previous forecast. Meanwhile, non-OECD demand is cut 230,000 b/d to 38.7 million b/d.

These demand outlook reductions follow a bleaker economic outlook from the International Monetary Fund, which now forecasts that global growth in gross domestic product will be a measly 0.5% this year. IEA says that widespread financial and economic collapse are now the key brakes on global oil demand.

With 2009 non-OECD oil demand now expected to climb only 500,000 b/d from last year, IEA sees the outlook for Asia and the former Soviet Union as particularly grim.

"Oil demand growth in China is thus expected to be less than a fifth of what was recorded in recent years, while in the rest of Asia and the FSU growth will probably be nil. Only Latin America and the Middle East, partly insulated by price subsidies and, in the case of the Middle East, a strong fiscal position, will be able to sustain relatively strong growth—but at about half the pace of previous years," IEA said.