Saturday, 16 May 2009

IEA forecasts big decline in oil demand

Manila Bulletin

PARIS (AP) – Oil consumption this year will fall at the sharpest pace since 1981 due to the crisis afflicting world economies, the International Energy Agency (IEA) said as it made new cuts to its forecast for crude demand.

In its closely watched monthly survey, the Paris-based agency said it now expects global oil demand to fall 3 percent to 83.2 million barrels a day this year, or 2.6 million barrels a day less than in 2008. It was the ninth consecutive monthly cut that the IEA has made to its oil demand forecast.

The estimate represents a slight cut to its last forecast of a 2.8 percent drop in demand this year, and comes on top of a 0.3 percent fall in crude consumption last year. It will be the first time oil demand has fallen for two consecutive years since 1982-1983.

Oil prices have jumped from near $50 a barrel earlier this month – and rose above $60 earlier this week – on hopes that the worst of the recession is over in the US, the world's biggest oil consumer.

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