IEA cuts 2009 oil demand to 83.4 million bpd

11 April 2009

The International Energy Agency (IEA) on Friday slashed its global oil demand forecast to 83.4 million barrels per day (bpd) in 2009, a further 1 million bpd lower than the previous estimate a month ago.  (See: OPEC expects global demand to drop in 2009)

The Paris-based adviser to 28 industrialised nations in its monthly survey said the oil demand across the world will contract by a hefty 2.4 million bpd or 2.8 per cent in 2009 compared to last year, as the global economic slump continues unabated, curtailing consumption levels to the lowest since 2004

The IEA forecast is based on an "unusually severe recession" in rich countries, and also revised growth projections for developing countries where oil demand is seen falling for the first time in 15 years.

"The pace of contraction is close to early 1980s levels, with a growing consensus that economic and oil demand recovery will be deferred to 2010," the IEA said.

The gloomier picture emerged as the global economy is expected to shrink 1.4 per cent in 2009 against the earlier estimates of a marginal expansion.

David Fyfe, the editor of the IEA report said "The big story is still demand. When we look to the medium term, we are going to have to take a very long, hard look at how much demand has been destroyed. We could be headed for more weakness."