Oil demand 'set to fall this year'

16 September 2009

Oil demand is still set to contract this year, despite hopes of an upturn in the global economy, according to Opec's latest monthly report.

The producer group warned that any recovery will be slow and drawn out, as it stood by its previous forecast that consumption will fall slightly in 2009.

Overall, oil demand is expected to contract by 1.56 million barrels a day in 2009 - reaching a total of 84.05 million - before rising by 500,000 barrels a day in 2010.

This may prompt home heating oil customers to stock up on supplies of the fuel at current prices, with any upturn in demand likely to cause crude prices to rise.

US crude for October delivery jumped by three per cent - or $2.07 (€1.41) - on Tuesday to close at $70.93 a barrel, after a sharp rise in US retail sales for August raised hopes of an economic recovery.

However, London Brent slipped seven cents lower to settle at $67.37 a barrel as it came under pressure ahead of the contract's expiration yesterday (Tuesday).

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