IEA Projects Global Oil Demand Down In 2008, Back Up to 500KB/D Net Increase In 2009 - Reuters

[hatrack]

LONDON (Reuters) - World oil demand growth will return in 2009 despite shrinking this year for the first time since 1983 due to the global economic slowdown, the International Energy Agency (IEA) said on Thursday.

The IEA's view is in stark contrast to the U.S. Energy Information Administration, which on Tuesday said demand is expected to shrink by 450,000 barrels per day in 2009 following a predicted 50,000 bpd decline in 2008.

In its monthly report, the Paris-based IEA cut its 2008 oil demand estimate by 350,000 bpd to 85.8 million bpd -- a 200,000 bpd year-on-year fall.

The adviser to 28 industrialized countries sees demand rebounding to 86.3 million bpd in 2009, based on the International Monetary Fund's assumption the global economy will gradually recover in the second half of next year.

EDIT

http://uk.reuters.com/article/businessIndustry/idUKTRE4BA1PW20081211?rpc=401&

[bhikkhu]

1. Well, the IEA has a great record for accuracy...

sarcasm of course. They may as well be meteorologists. I think the EIA is more likely to be accurate, while the IEA is probably trying to massage its short term predictions into a form that at least feasibly still supports its long term predictions. Which, needless to say, were ridiculous to begin with, and now made laughable by current oil price trends.

There is a self-feeding loop where high oil prices crimped economic growth, leading to recession, leading to low demand and low oil prices. Low oil prices lead not just to cuts in production, but to cuts in exploration, infrastructure maintenance, and everything that would support supply increases. Lacking supply increases, demand increases will lead naturally not to growing economies but to more expensive oil again.