OPEC Forecasts Continuous Decline in Global Oil Demand

The crude oil demand worldwide would continue to decline this year due to the global economic crisis, according to a monthly oil market report published Wednesday by the Organization of the Petroleum Exporting Countries (OPEC).

The report said that the global crude oil demand in the first half of this year averaged 85.6 million barrels per day, representing a reduction of 0.4 percent or up to 0.35 million barrels per day compared to last year.

The downward trend would continue in the second half of this year, with a decline of 1.6 percent or up to 1.4 million barrels per day, the report said.

According to the report, the current economic recession was the main reason for a drop in demand in the international crude oil market. Especially, major crude oil consumers, the member countries of the Organization for Economic Co-operation and Development (OECD) were seen with significant drops in oil demand.

The report also said that the crude oil demand of the OECD in 2008 declined 3.4 percent to 47.51 million barrels per day, with a reduction of 1.7 million barrels per day from the previous year. In which, North America declined 4.9 percent to 24.3 million barrels per day and Western Europe declined 0.6 percent to 15.2 million barrels per day.

The crude oil demand of the OECD would further drop in 2009, in which North America would decline to 23.7 million barrels per day and Western Europe would drop to 14.75 million barrels per day, according to the report.

In this context, the international market demand for OPEC oil was expected to average 28.7 million barrels per day, representing a drop of 2.1 million barrels per day from the previous year.

In addition, this report also shows that, OPEC crude oil output in March was 27.9 million barrels per day, with a drop of 145,000 barrels per day compared to February.

OPEC oil prices fell to less than 35 U.S. dollars per barrel by the end of 2008. It appeared to take a slight upward trend with fluctuation since the beginning of this year to 50 U.S. dollars per battle in April. However, due to the contracted oil demand by the prospect of economic weakness, the continuous climb of oil price was hard.

OPEC Secretary-General Abdalla Salem El-Badri as well as other OPEC leaders said that, the oil prices should be kept between 70 and 75 U.S. dollars per barrel, which would be able to support the sustaining OPEC industrial investment.

However, in view of the current severe downturn in the global economy, the prices between 40 to 50 U.S. dollars per barrel were also acceptable.

The next oil ministerial conference of OPEC will be held in Vienna on May 28 of this year, to discuss the OPEC oil output quota for the next phase.

Source: CRIEnglish