November 20, 2008

OPEC predicts lower demand for oil in 2009

It is reported that OPEC has predicted that the world demand for its crude will fall from the current level of 32.3 million barrel per day to 31.2 million barrel per day in 2009.

The Organization of Petroleum Exporting Countries in its monthly report said that a drop in demand for its crude, the first major decline since 2002, would lead to significant build in inventories in 2009. It said that combined with increasing OPEC capacity, this should further ease market conditions and likely help moderate prices.

The organization said it expected world oil demand to increase by 1.03 % to 87.71 million barrels per day with most of the growth in the transport fuel sector.

The report said that OPEC also revised its forecast for world oil demand growth in 2008 for the fourth time this year from 1.28 % to 1.20 %, saying demand would rise to 86.81 million barrel per day, up from 85.78 million barrel per day in 2007. However, the report added that high fuel prices, the US economic slowdown and a warm winter could result in a further drop in world oil demand growth.