Crude oil prices fell yesterday after the International Energy Agency said global demand for oil would record its sharpest annual drop since 1981. The developed world's energy watchdog predicted that demand for oil would shrink by 2.56m barrels a day to 83.2m b/d in 2009, compared with its April forecast for a 2.4m b/d fall in consumption this year.
The IEA said eight out of the world's ten largest oil consuming countries were likely to see a “marked fall” in oil demand as their economies slowed or contracted. Only India and Saudi Arabia were expected to see positive oil demand growth while consumption in China would fall slightly or remain flat.
The revised forecasts from the IEA followed a pointed warning from Opec in the previous session that the market faced “considerable risks” as fundamentals were “far from balanced”.