The Organization of Petroleum Exporting Countries Friday cut its global oil demand estimate for 2009, as it reiterated that the faltering world economy continues to erode demand for oil.
The group said 2009 world oil demand will be 1 million barrels a day lower than in 2008, at 84.61 million barrels a day, 400,000 barrels lower than it predicted last month.
"The spillover of the financial crisis into the real economy is now affecting both the developed and developing countries, implying that the impacts on oil demand in 2009 will be felt not only in OECD but also worldwide," the organization said in its March oil market report.
OPEC's revision still leaves its estimate for 2009 demand above that released by the International Energy Agency earlier in the day. The energy watchdog for the Organization for Economic Cooperation and Development trimmed its 2009 world oil demand estimate by 270,000 barrels to 84.4M barrels a day, a 1.2 million barrels a day contraction from their forecast a year earlier.
In light of the "overwhelmingly" negative economic data releases recently, OPEC said it expects further downward revision to oil demand growth projections.
Demand for crude oil produced by the exporting body is also expected to fall to 29.1 million barrels a day in 2009, the group said in the report, calculating a 1.8 million barrel a day decline from a year earlier.
Despite the largely gloomy outlook in its March report, OPEC also noted that government steps to stimulate global economies, along with the group's reduction in crude supply, helped stabilize the oil market.
U.S. oil prices in New York were trading 40 cents higher at $47.43 a barrel at 1247 GMT Friday, 18% higher since OPEC's last announced production cut on Dec. 17, 2008.
The exporting body is due to meet in Vienna Sunday to decide whether further trims in production will be needed in order to shore up prices.
Meanwhile, the organization's total oil production, excluding Iraq, in February was trimmed to 25.72 million barrels a day, 649,000 barrels a day lower from its output in January, OPEC said, citing data from secondary sources.