The Organization of Petroleum Exporting Countries Wednesday cut its global oil demand estimate again for 2009 due to the faltering world economy starting to hit demand in developing countries like China.
OPEC said in its April monthly report that "in 2009, world oil demand is forecast to fall for the second consecutive year, dropping 1.4 (million barrels a day) following a downward revision" of 400,000 barrels a day, having already cut its forecast by the same amount last month.
OPEC now sees global oil demand of 84.18 million barrels a day in 2009, compared with 85.55 million in 2008.
It said demand for oil in members of the Organization for Economic Cooperation and Development, "is forecast to decline over the entire year" by 1.5 million barrels a day to 46 million barrels a day. The OECD represents the world's most industrialized countries.
"Non-OECD is likely to see only minor growth of 0.13 mb/d," the OPEC report said. "On a quarterly basis, China's apparent oil demand in the first quarter moved into the red for the first time since 2005."
It said Chinese demand was down by 140,000 barrels a day to 7.83 million barrels a day in the first quarter compared with 7.97 million barrels a day on average for 2008.
However, OPEC still expects Chinese demand to rise by 40,000 barrels a day in 2009 to 8.01 million barrels a day.
On Friday, the OECD's energy watchdog, the International Energy Agency, cut its 2009 world oil demand forecast by 1 million barrels a day from earlier projections and said the global economic recession could yet force further reductions in consumption.
The cut in its forecast indicates OPEC has yet to be convinced demand will be boosted by a financial stimulus package announced at the summit of the Group of 20 developed and developing countries.
OPEC, however, did say that the G20 had lifted market sentiment, helping push the oil price up to about $50 a barrel from around $40 a barrel.
OPEC last year decided to cut 4.2 million barrels a day of its output to adjust to lower demand and prices but decided to keep its production unchanged at its last meeting on March 15. It is set to meet next on May 28.