LONDON/NEW YORK (Reuters) - Global oil demand is seen contracting more sharply this year than previously expected, as the deepening economic crisis spreads to the developing world.
World oil demand will decline by 430,000 barrels per day in 2009 to 85.43 million bpd, according to a Reuters poll of 10 analysts, banks and industry groups.
The large predicted fall is a significant shift from a Reuters poll in November, which forecast demand would slip by 20,000 bpd in 2009, following a similar decline in 2008.
“Demand growth in emerging nations almost offset the demand contraction in the developed world in 2008, but with demand growth now expected to almost halve in 2009 in the developing world, that is no longer the case,” said Francisco Blanch, head of commodities research at Merrill Lynch.
The average forecast for 2009 growth in countries outside the Organization for Economic Co-operation and Development (OECD) is now 650,000 bpd in 2009, compared with 840,000 bpd in the November poll, and growth of 1.38 million bpd in 2008.
“Over the past few months it has started to look like the emerging Asian economies are going to be hit much harder than previously anticipated as the slowdown in their export markets intensifies,” said Global Insight analyst Simon Wardell.
“Manufacturing and exports are going to slow and the drop in world trade will definitely hit oil demand.”
Global demand was revised lower for 2008 in the latest poll, with analysts saying consumption contracted 140,000 bpd last year as the pace of the global slowdown accelerated toward the end of last year.
Global oil demand last declined in the early 1980s, following the 1979 oil crisis and a severe recession in the United States.
The Paris-based International Energy Agency (IEA) -- adviser to industrialized nations -- on Friday revised its estimate of Chinese GDP growth down to just 6.5 percent following years of double-digit growth.
Rapidly rising consumption of oil from emerging economies led by China helped push crude from around $20 a barrel at the start of 2002 to a peak above $147 in July 2008.
Slowing demand has been the lead factor in sending prices crashing back down to about $40. The IEA predicts Chinese oil demand will grow by just 90,000 bpd in 2009. That is compared to average growth of around 400,000 bpd over the last three years.
The largest drop in demand will come from developed economies, where recessions are predicted to be most severe. OECD demand is forecast to fall by more than 1.1 million bpd to 46.54 million bpd in 2009, the Reuters poll showed.
Global oil demand tends to run about 2 percent below world GDP growth, analysts say. Recession among industrialized economies is expected to slow global GDP growth to just 1.2 percent this year.
Frederic Lasserre, head of commodities research at Societe Generale, said forecasts for global oil demand in 2009 could be cut further as economists continue to revise down expectations for GDP growth in developed and emerging economies alike.
“Most forecasters are still revising down their GDP expectations so predictions are likely to continue to fall.”
Some experts are suggesting oil demand in the OECD may never return to the 2007 peak. They contend last year’s record price spike and an increased focus on reducing carbon emissions to combat climate change may hold down fuel consumption even when the economy starts to recover.
Reporting by David Sheppard; Editing by Peg Mackey