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Page added on November 28, 2008

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Oil demand falls first time in a generation

LONDON/NEW YORK (Reuters) – Global oil demand is expected to decline slightly in 2008 and 2009, the first drop in a generation, as the most severe economic crisis since the 1930s slashes consumption across the developed world.

Worldwide demand will decline by 20,000 barrels per day (bpd) in both 2008 and 2009 to 86.03 and 86.01 million bpd respectively, according to a Reuters poll of 11 analysts, banks and industry groups.

The slight fall is a large shift from a Reuters poll of experts in August, which forecast demand would increase by nearly 1 million bpd next year. Demand has not declined since the early 1980s, following the 1979 oil crisis and a severe recession in the United States.

“Global GDP growth is the main driver of oil demand, and with the economic slowdown we see global GDP rising by just 1.2 percent next year,” Michael Lewis, head of commodities research at Deutsche Bank, said.

“Oil demand growth tends to lag world GDP growth by about 2 percent, so we think we’ll see demand falling.”


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