OPEC cuts estimate for world oil demand in 2008

ABS-CBN News

Posted at Jun 13 2008 07:34 PM | Updated as of Jun 14 2008 03:34 AM

Agence France-Presse

VIENNA - OPEC on Friday cut its 2008 estimate of growth in world oil demand, as high prices and slower economic growth brake demand in major industrialized countries and the United States in particular.

Global oil demand was now projected to grow by 1.28 percent in 2008, compared with the previous estimate of 1.35 percent, the Organization of Petroleum Exporting countries said in its June monthly report.

"World oil demand growth (in 2008) is forecast to grow by 1.1 million barrels per day (bpd) to average 86.88 million bpd, a downward revision of 0.1 million bpd from the previous report," OPEC said.

The slowing world economy and mild winter is weighing on demand in industrialized countries belonging to the Organization for Economic Cooperation and Development, OPEC said. At the same time, oil demand remains strong in non-OECD countries.

"In the OECD, especially in the US, demand for transport fuel (mainly gasoline) did not grow as expected as a result of slow economic activities and higher oil prices."

Demand for other products in other OECD countries "was not enough to offset the decline in oil demand in the US in the first five months of 2008," the report continued.

"The slow US economy along with current oil prices will have its effect on oil demand, not only in the US but across the OECD countries in the second half of this year."

At the same time, China, the Middle East, Latin America, and India "are expected to show healthy growth in oil demand for the remainder of the year."

Despite the recent removal of price subsidies in some Asian countries, "non-OECD is expected to show strong oil demand growth to some degree, partially offsetting the decline in the US, Europe, and the Pacific," OPEC said.