LEAK: Next Week The IEA Will Slash Oil Forecasts

oil ocean platform extraction

The Wall Street Journal appears to have gotten the heads-up on the contents of the International Energy Agency’s upcoming World Energy Outlook 2009.

The IEA is expected to give rather bearish demand forecasts, joining a lot of other muted demand growth forecasts provided by institutions such as the U.S. Energy Information Administration (EIA).

The ranks of the oil bears are growing.

WSJ: The International Energy Agency next week will make a “substantial” downward revision to its long-term forecast for global oil demand, a person familiar with the matter said, marking the second year running the group has slashed its view of the world’s thirst for oil.

A person familiar with the Paris-based IEA’s plans said “demand-management policies” are having more impact than previously expected in the developed world, which accounts for about 55% of world oil consumption. The IEA outlook, a guidepost for industry trends, is scheduled to be released Nov. 10.

“The rise in global oil consumption over the next 10 years could be minimal,” says Mr. Verleger.

If demand pessimists are correct, future increases in the price of crude could be damped as weaker consumption stretches world oil supply by billions of barrels. Various analyst estimates maintain that the roughly 2% a year average growth rate in world oil consumption seen earlier this decade — the biggest reason for crude prices hitting a record $147 a barrel last year — may turn out to be an anomaly and that annual growth in the neighbourhood of 0.5% to 1% is more the norm.

Read more here.

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