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Industry and Energy

Oil demand will sharply fall this year

16 January 2009 14:35 (UTC +04:00)

Oil demand will fall for a second year, the first back-to-back contractions since 1983, as a deepening recession erodes consumer spending, the International Energy Agency said, Bloomberg reports.
The adviser to 28 nations cut its global 2009 forecast by 1 million barrels a day on expectations the economic outlook will deteriorate. The IEA estimates consumption will shrink 0.6 percent to 85.3 million barrels a day. Forecasters including OPEC, JPMorgan Chase & Co. and Deutsche Bank AG have already said demand will fall this year.
The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the worldâ€™s oil, said demand for its crude will fall 4.2 percent this year as the deepening recession reduces spending on fuels.
OPEC lowered its estimate for 2009 worldwide oil demand this year by 20,000 barrels a day to 85.66 million barrels a day. That means demand will contract by 180,000 barrels a day, or 0.2 percent, similar to the percentage in last monthâ€™s report.
Oil prices have plunged more than $100 a barrel from a record in July as the U.S., Europe and Japan face their first simultaneous recessions since World War II. This monthâ€™s IEA revision is its largest since at least 1996.