World 2009 oil demand growth cut by 140,000 bpd

Global oil consumption was forecast to average 86.92 million bpd in 2009, about 780,000 bpd more than this year's demand but 140,000 bpd less than the agency had forecast just last month.

World oil use was projected to rise by only 330,000 bpd this year, about 340,000 bpd lower than EIA's projections last month.

‘The current slowdown in economic growth is contributing to the recent decline in oil demand,’ EIA said in its latest forecast.

However, a side benefit of economic problems and the credit market crisis is that they were helping to push crude oil prices lower.

‘Absent a major worldwide economic downturn that significantly impacts global demand, West Texas Intermediate crude oil prices are projected to average about $112 per barrel in both 2008 and 2009,’ EIA said.

Oil markets are expected to remain tight over the next six months, which will push WTI oil prices to $120 a barrel by next April, before declining to $106 by the end of next year, the agency said.

‘Further deterioration in actual or expected global economic growth as a fallout of the current financial crisis may lead to weaker oil prices,’ EIA said.

Oil demand in the United States is in much worse shape, and will actually fall this year by 830,000 bpd compared to 2007.

The decline in fuel consumption is expected to continue into next year, but at a much lower rate of 110,000 bpd. That would put 2009 oil demand at 19.74 million bpd, the lowest level in eight years, EIA said.