16 February 2009 15:33 [Source: ICIS news]
In the short term, however, crude oil demand will contract to 84m bbl/day in 2009, down 3m bbl/day from last July's forecast, said IEA executive director Nobuo Tanaka at a conference in ?xml:namespace>
With the current global financial crisis and the squeeze in the credit markets, it will be a hurdle to inject more investment in the oil industry, though more investment is needed to avoid a shortage of supply, Tanaka said.
The downward revision of the global demand forecast for oil was not only due to the continuous contraction in the global economy brought about by the ongoing financial crisis, but also because of the price oil peaking just above $147/bbl (€115/bbl) last summer, he said.
Demand for oil was expected to recover in 2010, which would be mainly fuelled by economic growth in Asia and the
Tanaka highlighted the need for mid- to short-term investment in order to avoid a shortage of supply and called for more investment in greener energy to meet the challenge of global warming.
“Economic growth remains key to short- to mid-term investment in oil,” he said.
The opportunity to invest in cleaner energy should be at the heart of any economic stimulus package, Tanaka said.
Refusing to speculate on future oil prices, he said: “We can explain why prices reach a certain level but we cannot project oil prices.”
The global economic crisis has continued to affect oil demand despite recent talks that OPEC may decide to cut supply further at its next meeting on 15 March in
“Alongside banks, there has been a sharp downward revision to economic forecasts by the international organisations such as the International Monetary Fund (IMF),” according to a report by BNP Paribas on 13 February.
“The IMF estimates world GDP growth in 2009 at 0.5% compared to its earlier estimates of 2.2% back in November,” the report said.
The oil markets started the week on a quiet note, and Brent and NYMEX were little changed from the previous close.
At 14:15 GMT, the April Brent contract was trading at $44.77/bbl, having settled down $0.06/bbl from Friday’s close.
At the same time, the March NYMEX contract was trading at $37.60/bbl, having settled at $37.60/bbl, up $0.09/bbl from Friday's close.
($1 = €0.78)
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