World oil forecast cut

VIENNA – World oil demand will grow more slowly than expected in the last quarter of 2007 and next year, and high prices may further curb consumption, the International Energy Agency said yesterday.

The revisions come a day after Opec agreed to raise oil output, a move that followed months of pressure from the Paris-based IEA which has been worried about the impact of near-record prices on consumers. The IEA, adviser to 26 industrialised countries, said in its monthly Oil Market Report world demand would rise by 2,35 million barrels per day (bpd) in the fourth quarter, 240 000 bpd less than expected last month.Opec on Tuesday raised oil output by 500 000 bpd, its first formal increase in more than a year, in a gesture to consumer nations worried by the economic impact of US$78 oil and rapidly diminishing fuel stocks.”It’s fair to say it’s a smaller increase than we would have hoped for,” said Lawrence Eagles, head of the IEA’s Oil Industry and Markets Division, of Opec’s move.”We hope if there are any further signs of tightening that they would respond accordingly.”In lowering its demand estimates, the IEA cited weaker than expected consumption in June and July and said it was too early to assess the impact of fallout from the subprime mortgage crisis on the US economy.”Mild weather and interfuel substitution have contributed to the fall in demand.Looking ahead, continued high prices may further dent demand,” the report said.The agency now expects world oil demand to average 87,8 million bpd in the last quarter of 2007, 250 000 bpd less than expected in August.Oil prices eased after the report was released.US crude was down six cents at US$78,17, just short of its US$78,77 record high.Even after the revision, the IEA still sees higher demand than some other forecasters.OPEC expects oil consumption in the fourth quarter to average 87,08 million bpd.The lower demand outlook also reduces reliance on crude oil from the Organization of the Petroleum Exporting Countries, source of more than a third of world supply.Demand for Opec oil in the fourth quarter is now expected to be 300 000 bpd less than previously expected, at between 32,4 million bpd and 32,8 million bpd, the IEA said.Nampa-ReutersThe IEA, adviser to 26 industrialised countries, said in its monthly Oil Market Report world demand would rise by 2,35 million barrels per day (bpd) in the fourth quarter, 240 000 bpd less than expected last month.Opec on Tuesday raised oil output by 500 000 bpd, its first formal increase in more than a year, in a gesture to consumer nations worried by the economic impact of US$78 oil and rapidly diminishing fuel stocks.”It’s fair to say it’s a smaller increase than we would have hoped for,” said Lawrence Eagles, head of the IEA’s Oil Industry and Markets Division, of Opec’s move.”We hope if there are any further signs of tightening that they would respond accordingly.”In lowering its demand estimates, the IEA cited weaker than expected consumption in June and July and said it was too early to assess the impact of fallout from the subprime mortgage crisis on the US economy.”Mild weather and interfuel substitution have contributed to the fall in demand.Looking ahead, continued high prices may further dent demand,” the report said.The agency now expects world oil demand to average 87,8 million bpd in the last quarter of 2007, 250 000 bpd less than expected in August.Oil prices eased after the report was released.US crude was down six cents at US$78,17, just short of its US$78,77 record high.Even after the revision, the IEA still sees higher demand than some other forecasters.OPEC expects oil consumption in the fourth quarter to average 87,08 million bpd.The lower demand outlook also reduces reliance on crude oil from the Organization of the Petroleum Exporting Countries, source of more than a third of world supply.Demand for Opec oil in the fourth quarter is now expected to be 300 000 bpd less than previously expected, at between 32,4 million bpd and 32,8 million bpd, the IEA said.Nampa-Reuters