Business | Oil & Gas
Opec cuts demand growth forecast
Opec on Tuesday cut its forecast for global oil demand growth in 2008 for a fourth time this year and said consumption would slow in 2009, signalling a more comfortable supply and demand balance.
- Reuters
- Published: 23:39 July 15, 2008
London: Opec on Tuesday cut its forecast for global oil demand growth in 2008 for a fourth time this year and said consumption would slow in 2009, signalling a more comfortable supply and demand balance.
The 13-member group, source of two in every five barrels of oil, also said the need for its oil in 2009 would post the first significant decline since 2002 due to slower world demand and rising supply from non-member countries.
"Market fundamentals have clearly been softening," Opec said in its Monthly Oil Market for July. "This trend in fundamentals is expected to continue - and even gather pace - into the coming year."
Opec's outlook adds to evidence that record-high oil prices are slowing demand in the industrialised world and follows other forecasts that a strain on supplies may ease in 2009. Oil hit a record $147.27 a barrel last week.
Demand will rise by 1.03 million barrels per day (bpd) this year, 70,000 bpd less than the previous forecast, the report by Opec economists said. The previous reductions were in May, February and June.
In its first look at 2009 in the monthly report, Opec said world consumption would rise by 900,000 bpd in 2009 while supply from non-member countries would expand at a faster rate of 940,000 bpd.
The need for Opec crude would decline to average 31.24 million bpd in 2009 from 31.95 million bpd in 2008, boosting the amount of production held in reserve within the group.
Opec has maintained that consumers have enough crude and blamed factors outside its control, such as a weak US dollar and concern over Iran's dispute with the West over Tehran's nuclear work, for rising prices.
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