IEA Cuts 2008 Oil Demand Forecast for Fourth Month

(Bloomberg) — The International Energy Agency, the energy adviser to 27 nations, cut its forecast for global oil demand in 2008 for a fourth month as record prices crimp consumption in the world’s most developed economies.

The forecast was cut by 390,000 barrels a day to 86.84 million barrels a day, from 87.23 million barrels last month, the Paris-based agency said today in its monthly report. After today’s revision, which “may not be the last,” the group expects world consumption to grow 1.2 percent this year, the slowest expansion since 2006.


Oil prices have doubled over the last year to $126.40 a barrel yesterday, and record energy costs may cause a global recession, IEA Executive Director Nobuo Tanaka said last month. Crude may rise to between $150 and $200 within two years as supply stagnates, Goldman Sachs Group Inc. analysts led by Arjun Murti said last week.

“Oil prices are too high for everyone, especially for developing countries which are also facing other price increases,” Tanaka said at a conference in Paris today. “There’s no clear single explanation for the high oil prices.”

Bloomberg