In its April oil market report The International Energy Agency has revised its outlook for 2009 worldwide oil demand to down by 1 million barrels per day.
The drivers of this revision include lower-than-expected Q1 demand and IEAs subsequent reassessment of global economic assumptions. IEA went on to say it believes that economic and oil demand recovery will be deferred to 2010.
With the expectation that global GDP will contract 1.4% this year, the agency now forecasts that worldwide oil demand will average 83.4 million b/d, which is 2.4 million b/d below 2008 demand.
The bulk of the latest forecast cut for this year's oil demand is for the first quarter.
IEA revised lower its estimate of first quarter 2009 demand by 700,000 b/d. Demand for middle distillates suffered despite spells of colder northern hemisphere weather, and industrial activity indicators remain universally weak, IEA states.
Forecast oil demand in countries of the Organization for Economic Cooperation and Development (OECD) has been adjusted down for 2009 on the basis of much lower economic assumptions. IEA reports that OECD countries are set to face an unusually severe recession, with overall GDP contracting 3.9%.
Consequently, the agency now forecasts 2009 OECD oil demand at 45.2 million b/d, down 2.4 million b/d from last year and 760,000 b/d lower than previously estimated.
Meanwhile, IEA also cut its forecast for non-OECD oil demand, as economic growth in emerging economies is now expected to grow just 1.9% this year.
Non-OECD oil demand will average 38.3 million b/d in 2009, almost 230,000 b/d lower than previously expected. Although small, this will be the first contraction in non-OECD demand since 1994, IEA adds.