Global oil demand to fall by 2.4 mln a day

Bloomberg

The adviser to 28 nations cut its 2009 forecast for an eighth consecutive month, lowering its outlook by 1 million barrels a day, or 1.2 percent, to 83.4 million barrels a day. The IEA also said supplies from outside the Organization of Petroleum Exporting Countries will drop this year.

"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 Paris-based adviser said in a monthly report Friday.

Demand will shrink by 2.8 percent this year as worldwide gross domestic product shrinks by 1.4 percent, according to the IEA, which until now had assumed the global economy would expand in 2009. The decline outpaces supply from OPEC’s third-largest producer, Iraq, which last month pumped 2.27 million barrels a day. The outlook "implicitly discards" the agency’s earlier view that industrial activity, and demand for fuels, would recover in the second half of the year.

Collapsing demand has left crude inventories in the world’s most developed nations, the Organization for Economic Cooperation and Development, at their highest since 1993, the IEA said. Stockpiles were equivalent to 61.6 days of consumption as of February. In December, OPEC ministers had expressed concern that a level of about 57 days was too high.

Non-OPEC supply will fall by 300,000 barrels a day this year, a second annual decline, to 50.3 million barrels a day. This is "largely because of adjustments on the biofuels side," said David Fyfe, head of the IEA’s oil industry and markets division. That forecast is 320,000 barrels a day lower than last month’s.