The global economic recession has rescued the world from an impending oil supply crunch, the consuming countries’ watchdog agency said as it cut its medium-term oil demand forecasts.
The International Energy Agency now expects global oil demand to grow each year by a paltry 0.6 per cent or 540,000 b/d in 2008-2014, pushing consumption from 85.8m b/d to 89m b/d. That is considerably less than 1m b/d average yearly increase the IEA had expected last year. If the lower-end GDP forecasts turn out to be correct, oil demand could actually contract over the period, with consumption at 84.9m b/d in 2014.
This means the all-important cushion of spare supply capacity held by Opec is now expected to reach a healthy 7.8m b/d next year, or 8 per cent of demand. Compare that to last year’s forecast, which had foreseen that cushion shrinking to a mere 1.67m b/d.