World oil demand dips in 2008
World oil demand is set to expand at its slowest rate in six years
during 2008 as high prices and the dismantling of Asian subsidy regimes
start to choke off demand, the International Energy Agency (IEA) said.
Global oil consumption will increase by 800,000 barrels per day this
year, 230,000 barrels lower than its previous forecast, according to the
IEA's monthly Oil Market Report. The IEA, which advises 27 Western
countries on energy issues, predicted that global demand would average
86.8 million barrels per day this year. However, it added that supply
growth this year "has been poor", and even higher prices would be
required to ensure the market remains in balance.
"The lull in oil demand growth, however, may only be temporary as
strong economic growth remains the key driving force," the Paris-based
agency said, pointing out that there was little chance of a cut in
subsidies in China, one of the world's biggest consumers, or in the
Middle East.
In recent weeks, the soaring price of oil, which reached a record
high of $139 a barrel last week, has forced the governments of India,
Indonesia, Malaysia, Sri Lanka and Taiwan to trim their subsidy regimes
on fuel, which the IEA says is likely to temper demand.
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