Shell says oil demand will recover in second half of next year

Royal Dutch Shell Plc, Europe’s biggest oil company, expects global crude demand to pick up in the second half of 2010, after declining the most since 1980 this year, according to Chief Executive Officer Peter Voser.

Demand will fall by about 2 million barrels a day this year as the recession curbs energy use, Voser said in an interview posted on the company’s Web site today. Consumption of natural gas in Europe will drop by about 5 percent this year, after 30 years of continuous growth, he said.

“We will face a difficult 2010,” Voser said. In the first six months of the year “we will still see a very slow pace, then picking up toward the second half.”

U.S. gas futures have fallen about 25 percent this year, while European contracts have slumped 52 percent. The 42 percent gain in New York crude follows agreements by the Organization of Petroleum Exporting Countries to reduce output by 4.2 million barrels a day. OPEC supplies about 40 percent of the world’s oil.

Shell, based in The Hague, is “much more gas-price driven than oil-price driven,” Voser said. Even so, the company will be “a robust organization” in 2010, he said. “We are convinced of our future cash-flow growth potential.”

Financial Post