LONDON - World oil demand will grow by less than expected this year and next due to high prices and weaker economic conditions, the International Energy Agency said on Wednesday.
In its September Oil Market Report, the agency lowered its 2008 world oil demand growth forecast by 100,000 barrels per day (bpd) to 690,000 bpd and also trimmed its forecast for 2009 global demand growth by 40,000 bpd to 890,000 bpd.
"High prices are having an impact on demand," said David Fyfe of the IEA. "The OECD (countries) are feeling the impact."
The IEA, adviser to 27 industrialized nations on energy policy, noted anecdotal evidence of a more permanent downward trend in demand in the United States, the world's biggest energy consumer.
These included a marked shift to more efficient vehicles, changing mobility and driving habits, signs that suburban living was gradually losing its appeal, the agency said.
Oil prices reached a record peak of $147.27 a barrel on July 11, but have fallen about 30 percent since then partly in response to signs of falls in demand.
The Organization of the Petroleum Exporting Countries responded this week with a cut in output targets of half a million barrels per day.
The agency saw any move to limit supply as potentially counterproductive when the global economy is in a fragile state.
The IEA said demand remained strong in emerging market countries, where oil is often subsidized, insulating consumers from the effects of high prices.
Demand growth from China, the world's second biggest energy consumer, is set to remain strong, despite a weakening world economic outlook.
"We are still working on the basis of pretty strong growth in oil demand of 5 to 6 percent from China going forward," Fyfe said. "We think it's premature to talk about a choking off of Chinese demand yet."
Global supply fell by 1 million bpd in August to 86.8 million bpd, the IEA said. This was due in part to North Sea maintenance, lower OPEC supply and disruptions to the Baku-Tbilisi-Ceyhan pipeline.
But oil inventories look more comfortable.
Stocks in OECD countries rose by 47 million barrels in July. "A large, unseasonal crude build from a revised June base and weaker demand leave end-July cover at 54.5 days," the IEA said.
The agency cut its forecasts for oil supplies from non-OPEC producers by 180,000 bpd for 2008 and by 85,000 bpd in 2009.
"We think non-OPEC supply could temporarily peak because of above-ground factors," said Fyfe. These included limits to access, delays, cost inflation and regulatory and fiscal uncertainty.
"We do think there is a bit of a bulge in new projects coming onstream over the next 12/18 months," he said. "But after that non-OPEC growth continues to look pretty sluggish again."
In its September Oil Market Report, the agency lowered its 2008 world oil demand growth forecast by 100,000 barrels per day (bpd) to 690,000 bpd and also trimmed its forecast for 2009 global demand growth by 40,000 bpd to 890,000 bpd.
"High prices are having an impact on demand," said David Fyfe of the IEA. "The OECD (countries) are feeling the impact."
The IEA, adviser to 27 industrialized nations on energy policy, noted anecdotal evidence of a more permanent downward trend in demand in the United States, the world's biggest energy consumer.
These included a marked shift to more efficient vehicles, changing mobility and driving habits, signs that suburban living was gradually losing its appeal, the agency said.
Oil prices reached a record peak of $147.27 a barrel on July 11, but have fallen about 30 percent since then partly in response to signs of falls in demand.
The Organization of the Petroleum Exporting Countries responded this week with a cut in output targets of half a million barrels per day.
The agency saw any move to limit supply as potentially counterproductive when the global economy is in a fragile state.
The IEA said demand remained strong in emerging market countries, where oil is often subsidized, insulating consumers from the effects of high prices.
Demand growth from China, the world's second biggest energy consumer, is set to remain strong, despite a weakening world economic outlook.
"We are still working on the basis of pretty strong growth in oil demand of 5 to 6 percent from China going forward," Fyfe said. "We think it's premature to talk about a choking off of Chinese demand yet."
Global supply fell by 1 million bpd in August to 86.8 million bpd, the IEA said. This was due in part to North Sea maintenance, lower OPEC supply and disruptions to the Baku-Tbilisi-Ceyhan pipeline.
But oil inventories look more comfortable.
Stocks in OECD countries rose by 47 million barrels in July. "A large, unseasonal crude build from a revised June base and weaker demand leave end-July cover at 54.5 days," the IEA said.
The agency cut its forecasts for oil supplies from non-OPEC producers by 180,000 bpd for 2008 and by 85,000 bpd in 2009.
"We think non-OPEC supply could temporarily peak because of above-ground factors," said Fyfe. These included limits to access, delays, cost inflation and regulatory and fiscal uncertainty.
"We do think there is a bit of a bulge in new projects coming onstream over the next 12/18 months," he said. "But after that non-OPEC growth continues to look pretty sluggish again."
