Opec crude demand to drop 1.7 mb/d in 2009

Written by Sanjay Jog | Mumbai | Updated: Feb 15 2009, 05:33am hrs
The global oil demand continues to contract in the current meltdown. Organisation of the Petroleum Exporting Countries (Opec) in its monthly oil report for February released on Friday, has revised down demand for Opec crude by 0.2 mb/d. Which reflects lower than expected growth in world oil demand. The required estimated Opec crude is now at 29.2 mb/d, a decline of 1.7 mb/d from the estimated 2008 figure. In quarterly terms, demand for Opec crude is now expected at 29.7 mb/d, 28.7mb/d, 28.8 mb/d and 29.6 mb/d respectively. Demand for crude in the first three quarters shows a strong decline of around 2.0 mb/d compared to the same period last year while the fourth quarter is expected to decline by around 1.2 mb/d.

On the other hand, non-Opec supply is projected to average 50.89 mb/d in 2009, an increase of 0.55 mb/d over the estimate for last year and a downward revision of 30 mb/d from the previous assessment. On a quarterly basis, non-Opec supply is expected to average 51.06 mb/d, 50.72 mb/d, 50.64 mb/d, and 51.15 mb/d respectively.

World oil demand has continued its steep decline from last year and is expected to follow this strong negative pattern at least for the first three quarters of the year. Oil demand in OECD (Organisation for Economic Co-operation and Development) countries is experiencing a steep decline resulting from the region s economic depression. Demand in Oecd countries, North America, Europe, and the Pacific declined by 1.2 mb/d y-o-y in January. However, the positive growth in non-OECD demand reduced the world decline to only 0.7 mb/d. Although the OECD regions in general are colder than average by 10%, which led to more demand in heating oil and kerosene, slowing industrial production has suppressed consumption of industrial fuel. As a result of global slump, world oil demand has been revised down a further 0.4 mb/d to show a total decline of 0.6 mb/d in 2009 to average 85.1 mb/d. The decline in OECD is expected to fall by half a million barrels per day as a result of an improved outlook in the second half of the year .

Furthermore, non-OECD oil demand will add another 0.6 mb/d to annual growth in the second half of the year. North America forecast to decline by 0.6 mb/d in 2009. Developing countries growth revised down by 0.1 mb/d to show a growth of 0.35 mb/d. Other Asia projected to grow by just 0.6% in 2009.