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News > International
Oil demand to tail off
February 12, 2001: 8:11 a.m. ET

IEA trims 2001 forecast by almost 10%, blames slowing economic growth rate
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LONDON (CNN) - Oil demand will slacken off in 2001 as slower global economic growth gnaws away, the Paris-based International Energy Agency said on Monday.

The Organisation for Economic Co-operation and Development-linked agency cut its forecast for oil demand growth by 140,000 barrels a day to 1.5 million barrels a day, a near-10 percent revision.

"The global economy is slowing, curbing demand," IEA said in its monthly report. Higher crude prices and mild weather in Europe and Asia are also to blame for shrinking demand.

Industry oil stocks in OECD countries fell by 2 million barrels a day in December.

graphicThe Brent crude futures contract for March delivery was down 41 U.S. cents at $28.84 in midday London trade on the International Petroleum Exchange.

The agency forecast more volatility in crude oil prices as the impact of a production cut by the Organisation of Petroleum Exporting Countries filters through the market.

OPEC, which is responsible for some 40 percent of world oil supply, agreed to cut production in January by 5 percent, or 1.5 million barrels a day in an effort to stabilise prices.

Oil prices have swing wildly since December 1998 when they fell to just below $10 per barrel to hit more than $34 in October last year.

The oil cartel had jacked up production four times last year, attempting to rein in the price. graphic




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