Half a tank: the EIA has forecast slowing oil demand this year and next - the first time since the 1980s that demand has shrunk two years in a row
EIA sees world oil demand shrinking
World oil consumption will shrink both this year and the next, making it the first time since the 1980s that global crude demand has fallen years in a row, the US Energy Information Administration (EIA) said in a report issued today.
"Global oil consumption is expected to decline by 50,000 barrels per day in 2008 and by 450,000 bpd in 2009, which would mark the first time in three decades that world consumption would decline in two consecutive years," the EIA said in its monthly short term outlook.
The lower forecast came as the EIA revised down its projection for 2009 global gross domestic product growth to 0.5% next year, down from 2.7% this year. Last month, the EIA forecast 2009 GDP growth of 1.8%.
"The current global economic slowdown is now projected to be more severe and longer ... leading to further reductions of global energy demand and additional declines in crude oil and other energy prices," the EIA said.
The last time annual world petroleum demand fell was in 1983, according to EIA data.
The EIA said it expects crude oil to average $51 a barrel next year, while winter heating oil costs should be lower than last year's levels.
Winter heating oil prices will average $2.53 a gallon this winter, down 24% from last winter, according to the report.
The EIA also said it expected gasoline prices to average $2.03 a gallon and diesel prices to average $2.47 a gallon in 2009.
Henry Hub natural gas prices will average $6.25 per million cubic feet, down from $9.17 MMcf in 2008.
The EIA also cut its forecast for Opec oil production for the first quarter of 2009 to 30.64 million bpd from its earlier estimate of 31.26 million bpd.
In its December short-term energy outlook, the EIA said Opec's output next year would average 30.61 million bpd, down from the 31.13 million bpd the agency forecast last month.
Separately, oil production from non-Opec countries was expected to increase by just 410,000 bpd in 2009, down from the EIA's prior estimate of 490,000 bpd.
That would put non-Opec output next year at an average 49.09 million bpd, down from 49.2 million bpd the EIA has previously forecast.