IEA said forecast worldwide oil demand for 2009 has been revised down slightly (since April 2009) following weaker-than-expected preliminary data in many regions such as the US, China and Russia.
Preliminary data for early 2009 suggest little upside for now in our demand assessment, despite signs of green shoots of recovery in the global economy. These ‘green shoots’… may be interpreted as proof that the global recession has bottomed out, IEA said.
But IEA added that an improvement in economic activity could be due merely to firms building up their inventories of goods again after a slump in production.
The agency observed: As far as oil is concerned, the latest available data indicate that the ‘demand green shoots’, if any, continue to be buried under the thick ice of the current economic winter.
Despite oil prices strengthening to six-month high points around 60 dollars this month, new bullish macroeconomic sentiment has not yet produced signs of oil demand recovery and oil market fundamentals remain weak, IEA said.
According to the IEA’s latest data, demand for oil products decreased by 5.9% in North America and 7.6% in Asia, on a 12-month comparison in March 2009. The fall in Europe was a relatively modest 0.3%.
IEA’s latest data showed the supply of oil increasing in April by 230,000 barrels per day to 83.6 million owing to a increase in production by member of the OPEC cartel of leading oil producers.
OPEC in 2008 agreed to a series of production reduces to prop up the price of oil which had decreased from a highest around $147 a barrel last summer.
The IEA said OPEC members had enacted nearly 80% of the reductions, but compliance dipped slightly in April 2009.
Market reports abound suggesting disquiet among core OPEC members over the degree of compliance by Iran and Angola in particular, IEA said.
