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The International Energy Agency on Friday cut its 2009 world oil demand forecast by a hefty 1 million barrels a day from earlier projections and said the global economic recession could yet force further reductions to consumption. The Paris-based agency, in its monthly oil market report, said it expects global oil demand this year to slump to 83.4 million barrels a day on average compared with previous estimates. That is 2.4 million barrels a day, or almost 3%, below 2008 consumption levels. David Fyfe, the editor of the report, said the IEA made the revision, which follows many others from past months, after cutting its world economic growth forecast. It now expects the global economy to swing to a contraction of 1.4% versus 2008 from earlier estimates for a small expansion. “The big story is still demand. When we look to the medium term, we [the IEA] are going to have to take a very long, hard look at how much demand has been destroyed. We could be headed for more weakness,” Mr. Fyfe
The International Energy Agency cut its oil-demand forecast for a ninth consecutive month, predicting consumption this year will fall the most since 1981 as the recession lingers. Oil prices have climbed 34 percent this year, trading above $60 in New York this week for the first time in six months on increasing optimism about an economic recovery and record production cuts by the Organization of Petroleum Exporting Countries. Still, U.S. crude stockpiles remain near the highest since 1990 as the recession saps fuel demand. OPEC crude production is beginning to rise as higher prices encourage members to pump more than their quotas. ‘Very Weak’ Demand is weakest in the world’s most developed nations, where consumption will drop by 5.1 percent this year, the IEA said. The IEA cited “very weak” demand data in April for the U.S., and to a lesser extent, Europe. Crude inventories in the industrial economies of the Organization for Economic Cooperation and Development are at their highest sin
