The slump in global oil demand in 2009 will be less severe than previously forecast and consumption will increase next year as the world economy stabilises, the International Energy Agency (IEA) said today.
The Paris-based IEA, which advises oil-consuming countries, said crude demand would reach 84.4 million barrels a day this year, down 2.2 per cent from 2008 levels, better than the 2.7 per cent decline the agency forecast previously.
The IEA also lifted its forecast for global oil demand next year to 85.7 million barrels a day, or half a million barrels a day more than its previous forecast, for growth of 1.5 per cent.
"There is growing evidence that the global economy may be finally stabilising," the IEA said in its monthly oil report. Despite this, the IEA warned that demand in OECD countries "is poised to remain weak for the remainder of the year."
The IEA cautioned as well that "the spectre of a double-dip, 'W-shaped' recession which would undermine oil demand growth next year, cannot be entirely discounted".
The IEA now expects oil demand in OECD countries to fall 4.7 per cent this year and grow only 0.1 per cent in 2010. It raised its estimates for demand in both years by 270,000 barrels a day, citing better than expected second quarter data and indications that the second half could be stronger than anticipated, notably in North America. The agency warned however that "there is considerable uncertainty regarding the prospects of a sustained US economic recovery".
