LONDON - World oil demand will contract more than expected this year and the weakening economy may further erode consumption, OPEC said on Thursday, building a case for additional supply cuts.
In a monthly report, OPEC said it expected demand to fall by 180,000 barrels per day (bpd) in 2009, 30,000 bpd more than its previous forecast. Oil use is declining this year and in 2008, the first drop in more than 20 years.
"The considerable uncertainty about the course of the recovery implies the potential for further deterioration in world oil demand growth this year," said the report, which is written by OPEC economists.
The revision comes in response to mounting evidence that the world economy is far weaker than previously thought, undermining oil demand and prices. Oil has slid to around $38 a barrel from a record high of $147.27 struck in July.
Still, OPEC's prediction of falling demand is less severe than that of the U.S. government's Energy Information Administration, which on Tuesday said consumption would drop by 810,000 bpd in 2009.
OPEC has agreed at meetings since September to cut its oil output by 4.2 million bpd to combat the slump in demand, and some in the group are going even further to prop up the market.
Saudi Arabian oil minister, Ali al-Naimi, confirmed on Tuesday that the world's top exporter was pumping 8 million bpd, in line with its OPEC target, from January 1 and would reduce production further in February.
In the report, the Organization of the Petroleum Exporting Countries, source of two in every five barrels of oil, slightly lowered its prediction for supply from producers outside the group.
Non-OPEC countries are expected to pump 51.15 million bpd in 2009, up 580,000 bpd from last year and down 70,000 bpd from the previous forecast.
OPEC forecast demand for its crude oil would average 29.48 million bpd in 2009, down 1.4 million bpd from 2008.
In a monthly report, OPEC said it expected demand to fall by 180,000 barrels per day (bpd) in 2009, 30,000 bpd more than its previous forecast. Oil use is declining this year and in 2008, the first drop in more than 20 years.
"The considerable uncertainty about the course of the recovery implies the potential for further deterioration in world oil demand growth this year," said the report, which is written by OPEC economists.
The revision comes in response to mounting evidence that the world economy is far weaker than previously thought, undermining oil demand and prices. Oil has slid to around $38 a barrel from a record high of $147.27 struck in July.
Still, OPEC's prediction of falling demand is less severe than that of the U.S. government's Energy Information Administration, which on Tuesday said consumption would drop by 810,000 bpd in 2009.
OPEC has agreed at meetings since September to cut its oil output by 4.2 million bpd to combat the slump in demand, and some in the group are going even further to prop up the market.
Saudi Arabian oil minister, Ali al-Naimi, confirmed on Tuesday that the world's top exporter was pumping 8 million bpd, in line with its OPEC target, from January 1 and would reduce production further in February.
In the report, the Organization of the Petroleum Exporting Countries, source of two in every five barrels of oil, slightly lowered its prediction for supply from producers outside the group.
Non-OPEC countries are expected to pump 51.15 million bpd in 2009, up 580,000 bpd from last year and down 70,000 bpd from the previous forecast.
OPEC forecast demand for its crude oil would average 29.48 million bpd in 2009, down 1.4 million bpd from 2008.
