IEA Cuts Demand, Warns of Future Supply Shock

(China Post) - The International Energy Agency cut its forecast again for global oil demand this year on Wednesday, but warned about a future supply crunch because of low investment levels.

The energy watchdog for industrialized nations forecast that global oil demand would measure 84.7 million barrels per day (bpd) on average in 2009 — 570,000 bpd less than its last forecast made in January.

At this level, demand would be 1.1 percent or 1.0 million bpd less than in 2008, when demand also fell compared with the year earlier.

“We seem to be on a downward escalator we can't get off of,” said David Fyfe, editor of the IEA report.

“Until we see a bottoming out and a degree of stability on the financial and economic side, energy market weakness is going be with us for some time.”

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