The International Energy Agency has once again lowered its projection for world oil demand in 2009, despite some scattered signs of an emerging economic recovery.
In its latest monthly report, the IEA says that global oil demand will be a million barrels per day less than in previous estimates. The figure is now expected to be 83.4 million barrels per day, or 2.4 million less than in 2008.
The agency notes that this rate of contraction is similar to what was experienced in the early 1980s, which was also a period of significant recession. There is also now said to be a "growing consensus that economic and oil demand recovery will be deferred to 2010."
The downward estimate also comes at a time when oil prices have been showing renewed stability, having gone over $50 per barrel for the first time since late last year after testing lows in the mid-thirties range. The report questions whether additional gains will be recorded in the short term given "pervasively weak market fundamentals."
Elsewhere, a Wall Street Journal report cited David Fyfe, editor of the IEA report, as saying that one reason for the downward estimate was first quarter figures showing that oil consumption had been about 700,000 barrels a day lower than what was previously expected.
Breaking news brought to you by the Oxford Princeton Programme, specialists in energy courses. This and other related topics are part of the forthcoming course Oil Trading Orientation from 2-4 June, 2009 in Stavanger, Norway.
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