Fall in oil likely to be moderate: ICRA

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Oil rises to $117 on Russia-US tensionOil falls by more than $1 to below $112Fall in oil likely to be moderate: ICRA'Supply crunch may bring $200 oil in 5-10 yrs'

World oil prices may have softened but a further fall in rates is expected to be only moderate because of higher demand from Brazil, Mexico and countries from Asia and the Middle-East, an ICRA report said.

"Global demand in the latter half of 2009 is expected to touch 89 million barrels per day, compared to 85 million barrels per day at the end of 2007," the report 'Oil & Gas Sector Outlook' said.

Global oil prices have fallen from the peaks of USD 147 a barrel touched last month to USD 113 per barrel this week.

ICRA said the annual demand for oil is likely to be met, if additional OPEC supplies until the end of 2009 are maintained at 37 million barrels per day the level first forecasted for quarter one of fiscal 2008.

It is unlikely that crude prices would move below the 2006 levels of USD 67 per barrel in the next one year, given the supply constraints and past record of slippages in new project development, ICRA said. There are also contingencies to be provided for short-term supplies disruptions and demand spikes.

The current hike in crude oil prices has been attributed partly to the increased demand from India and China – whose combined consumption accounts for 50 per cent of the total US consumption and about 13 per cent of total global consumption.

India, which imports 78 per cent of its crude oil requirement, had a consumption growth in 2007 pegged at 6.5 per cent, ICRA said.