High prices, slowdown seen denting 2008 oil demand

By Santosh Menon - Poll

LONDON (Reuters) - World oil demand growth is set to lose momentum in 2008 as high prices and a slowdown in the world's industrialized nations led by top consumer the United States hit consumption, a Reuters poll showed on Thursday.

A poll of 20 analysts by Reuters forecast average world oil demand growth this year at 1.43 million barrels per day (bpd), down from 1.56 million in a similar poll last August and well short of the International Energy Agency's forecast of 1.98 million bpd.

The poll also showed oil demand growth slipping further to 1.32 million bpd in 2009.

"The twin forces of high prices and a material economic slowdown will depress oil demand growth rates across the OECD economies to a degree not seen since the early nineties," said UBS economist Jan Stuart, who cut his expectations for 2008 oil demand growth to 1.3 percent from nearly 1.7 percent.

The faltering oil demand growth momentum could ease the pressure on the Organisation of Petroleum Exporting Countries to raise crude output, and may even strengthen the arguments of those within OPEC pressing for an output cut.

OPEC ministers are expected to take a fresh look at the group's output policy in Vienna next month, after a meeting last week decided to keep oil supplies unchanged.

The poll showed demand for OPEC crude oil would rise on average by 490,000 barrels per day in 2008 to 31.49 million bpd, down from 31.66 million bpd in last year's poll.

OPEC last raised output by 500,000 bpd from November 1 last year, but has since rebuffed repeated calls to boost output.

Oil has retreated from peaks above $100 a barrel hit early last month on growing worries that top consumer the United States is sliding into a recession, which could potentially hurt the global economy, and with it, oil demand.

While a booming China is viewed by many as a savior to global oil demand, some believe it too will not be able to remain unaffected by a slowdown.

"We continue to believe that China will not be able to emerge unscathed from the adverse impact of a fall in its exports to the U.S. and the European Union," the Centre for Global Energy Studies said.

The Reuters poll showed oil demand from China forecast to rise by 410,00 bpd this year, unchanged from last year's poll. Chinese oil demand was forecast to slip to 380,000 bpd in 2009.

Tables in millions of barrels per day (mbpd).

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