Oil demand to post sharpest fall since 1981: IEA

LONDON (Reuters) – World oil demand this year will post the sharpest annual decline since 1981 as the economy struggles to bounce back, the International Energy Agency (IEA) said on Thursday.

Demand will contract by 2.56 million barrels per day (bpd) in 2009, the IEA, which advises 28 industrialised countries, said in a monthly report. It previously forecast demand would fall by 2.4 million bpd this year.

Oil market fundamentals remained weak and a rise in oil prices, which hit $60 a barrel for the first time in six months on Tuesday, was due to sentiment rather than evidence of higher consumption, the agency said.

“The oil price seems to have moved a bit higher in the past month largely on the basis of equity markets and sentiment about potential economic recovery,” David Fyfe, head of the IEA’s Oil Industry and Markets Division, told Reuters.

“But we’re not seeing it in terms of the preliminary demand data for early 2009.”

Reuters