Energy agency sees slowdown in oil demand

PARIS: Global demand for oil is likely to be slightly lower than previously estimated as the effect of shrinking government subsidies for fuel in Asia softens demand in the region, the International Energy Agency forecast Tuesday.

The agency forecast in its monthly Oil Market Report that global oil consumption would average 86.8 million barrels a day in 2008, or 70,000 barrels a day below the estimate that it made in its last report. Still, that would make overall demand 0.9 percent higher than in 2007.

The IEA is an energy policy adviser to the Organization for Economic Co-operation and Development, a group of 30 advanced economies, mostly in the West.

The reduction of price subsidies in recent weeks for fuel in non-OECD countries including Indonesia, Malaysia, Sri Lanka, Taiwan and India, “should slightly tame oil demand growth in that regi

on,” it said.

Changes are happening in the OECD economies that will have an effect on demand, the report said, but they will “take time to filter through.” It cited the reduction in flights by airlines in the face of soaring fuel costs.

International Herald Tribune