The world's top energy forecasters look set to cut further their estimates of oil demand for this year as the global economy slips towards its first contraction since World War II, analysts say.
The International Energy Agency (IEA), which advises 28 industrialised countries, is due to publish its closely watched monthly report on March 13th and it tends to reflect estimates for world economic growth by the International Monetary Fund.
The IMF has steadily cut its 2009 growth forecasts and is bracing for global economic shrinkage this year, as bank lending stalls, factories close and unemployment rises.
The Organization of the Petroleum Exporting Countries is also due to release its monthly Oil Market Report on March 13th and it too will almost certainly slash demand forecasts.
A packed week for data sees the release of the US Energy Information Administration's monthly report on March 10th and this may also contain a cut in its demand forecast.
OPEC oil ministers meet in Vienna on March 15th and oil demand estimates will be key to their decision on how much oil to pump. Some member countries, including Iran, Venezuela and Libya, have already raised the possibility of a further production cut.
“Keep your eyes on actual and forecast levels of global GDP (gross domestic product). It is a proxy for oil demand,” said David Hufton, managing director of brokers PVM.
“The dreadful GDP figures being revealed for the fourth quarter all over the world are not just dry, sterile data to be yawned at. It is the sum of what is going on in various economies and is a key indicator of health.”
Last month, the IEA forecast world oil demand would contract by 980,000 barrels per day (bpd) this year to 84.7 million bpd.
The IEA projection followed a cut by the IMF in its estimate for global GDP growth to just 0.5 per cent for 2009.
Reuters