OPEC expects global demand to drop in 2009

14 March 2009

The Organisation of the Petroleum Exporting Countries (OPEC) yesterday forecast that the global oil demand for 2009 would drop by 1.01 million barrels per day (bpd) to 84.61 million bpd or about 74 per cent higher than the earlier estimated drop of 580,000 bpd.

In its monthly report, OPEC said that oil demand is contracting faster than expected due to the deep global recession.

"With continued economic deterioration and demand erosion as well as the impending low demand season, there is a likelihood of renewed pressure on prices. Oil prices needed to stay at levels that support energy investment to help sustain longer-term economic growth'' the report said.

An OPEC meeting is scheduled in Vienna on March 15 to review the issues.

The report said that OPEC's action so far had managed to help halt the steep downward slide in oil prices and keep them close to $40 a barrel.

Since September 2008, OPEC has promised to cut production by 4.2 million bpd, equal to about 5 per cent of world demand.