OPEC slashes oil demand forecasts as worldwide recession looms
November 17th, 2008 - Posted in Energy PricesVIENNA (AFP) – A looming global recession is undermining worldwide demand for oil, the Organization of Petroleum Exporting Countries said Monday, as it slashed its forecast for growth in world oil demand for both this year and next.
OPEC said in its November monthly report that continued robust demand in developing and emerging economies would not be sufficient to offset slumping demand in highly developed countries.
This year, economic turmoil “continues to undermine oil demand growth, especially in the OECD (Organisation for Economic Co-operation and Development) countries,” the report said.
“Led by losses in the US, OECD oil demand showed a major drop of 1.7 million barrels per day (bpd) year-on-year in October.
“Non-OECD oil demand growth stood at 1.2 million bpd, resulting in a decline of total world oil demand of around 0.5 million bpd.”
While cold weather and falling prices “might to a certain degree help fourth-quarter oil demand … demand is not expected to overcome the major decline resulting from the economic downturn,” OPEC said.
Vehicle sales slumped 30 percent in October. And in addition to the strong decline in transport fuel, petrochemical industry oil consumption “is showing a strong decline as well.”
“Due to the declining oil demand in OECD, world oil demand in 2008 was revised down by 260,000 bpd and is now expected to grow by 290,000 bpd to average 86.2 million bpd,” the report said.
“Should the weather become warmer, then further downward revisions might be possible.”
Looking ahead to next year, oil demand growth in 2009 “will be boosted mainly by non-OECD countries, particularly the Middle East, Asia, and China,” OPEC said.
“Deteriorating economies in OECD countries are estimated to yield in declining oil demand which is forecast to pull total world oil demand growth down to less than 600,000 barrels per day in 2009.”
Thus, world oil demand growth in 2009 was revised downwards from 760,000 bpd to 490,000 bpd, with global oil demand next year set to average 86.68 million bpd, OPEC said.
