OPEC further lowers crude demand forecast for 2009

18 November 2008

The Organisation of Petroleum Exporting Countries (OPEC) has once again reduced its 2009 demand forecast, citing lower demand in fuel consumption due to the global economic slowdown, and thereby paved the  way for a further cut in production.

Lowering its estimate for the third time in a row, the Vienna-based organisation in its latest monthly oil market report forecast demand for next year at 86.68 million barrels per day, 5,30,000 bpd less than its prediction in October, citing downturn of industrialised economies and decline in demand in the petrochemical and transportation industry.

OPEC forecast now stands at 30.9 million barrels per day next year to its previously forecast demand of around 31.1 million bpd.

"The downbeat economic forecasts have darkened the outlook for oil demand substantially,'' OPEC oil market report said.

"The rising risk of a prolonged global economic recession with further downward uncertainties for oil demand growth continues to undermine market sentiment, placing strong downward pressure on prices," the report said, adding, "In the current, extremely volatile situation, closer monitoring and more frequent intervention are required."

London based, Centre for Global Energy Studies (CGES) has also forecast a contraction in global oil demand for the first time in 25 years amid a severe global economic slowdown.