PARIS: Demand for oil will slip in the coming months amid a global economic downturn, the International Energy Agency forecast Friday – but said prices may remain high because of supply uncertainties.
The Paris-based IEA revised down its overall forecast for oil demand in 2008 by 310,000 barrels a day to 87.2 billion, following new projections on slumping worldwide economic growth by the International Monetary Fund.
Declining U.S. demand drove the downward revision.
Falling demand in rich countries in the past delivered some relief from high oil prices, which retreated Friday to below $110 a barrel in Asian trading.
But the IEA report also noted a drop in global oil supply in March, by 100,000 barrels a day.
The report forecasts a global oil supply surplus in April and May, but notes that a similar surplus last year did not stem rising oil prices.
Pipeline sabotage in Niger and Iraq and a strike in Gabon in recent weeks “illustrate the potential for downside supply risks, the report says.
Despite weakening economic growth, prices remain high because of “concerns that projected stockbuilds may not materialize, or may not be high enough to cushion against low spare capacity and geopolitical risks, the report says.
Saudi Arabian Oil Minister Ali Naimi said Thursday that prices are not rising because of a lack of supply. “I believe inventories are building. The world is producing more oil than is being consumed, he said at an oil summit in Paris.
The IEA is the energy watchdog for the OECD, a grouping of the world s most industrialized countries. The IEA s monthly reports also measure oil supply and demand in non-OECD countries. -AP
