OPEC further cuts world oil demand forecast

According to Reuters, OPEC cut its forecast for world demand for its crude oil next year due to the slowing global economy, building a case for further oil supply cuts to prop up prices. In a monthly report, OPEC said it expected 2009 demand for its oil to average 30.92 million barrels a day. That is 220,000 bpd less than last month''s forecast and 920,000 bpd less than its estimate for 2008 demand. The revision comes in response to mounting evidence that the world economy is far weaker than previously thought, undermining oil demand and prices. Oil has slid to around $57 a barrel from a record high of $147.27 in July. In the report, the Organization of the Petroleum Exporting Countries, source of two in every five barrels of oil, also cut its forecasts for growth in world oil demand this year and next. The report lowered OPEC''s 2009 forecast for global oil demand growth by 270,000 bpd to 490,000 bpd and trimmed the 2008 estimate by 260,000 bpd to 290,000 bpd. With the latest downward revision, OPEC has almost halved its forecast for 2009 oil demand growth from its first prediction of 900,000 bpd given in June. Oil prices fell after the report was released, but later pared losses on news that pirates took control of a large Saudi-owned oil tanker in the Arabian Sea. OPEC''s forecast for demand growth next year remained higher than that of the International Energy Agency, which last week slashed its estimates in response to the worsening economic outlook. The IEA, an adviser to 28 industrialized countries, expects oil consumption next year to expand by just 350,000 bpd. OPEC decided in October to reduce supply by 1.5 million bpd from November 1, but the move has so far failed to stem the slide in prices. It has called another round of talks that could pave the way for a further supply cut. The group pumped 32.04 million bpd in October, according to secondary sources cited by OPEC in the report, almost one million bpd more than the expected demand for its oil in 2009. OPEC oil ministers will meet informally on the sidelines of a gathering of Arab oil producers on November 29 in Cairo and another meeting of the group is scheduled for December 17 in Algeria.