OPEC again cut its forecast for 2009 global oil demand, the cartel announced Wednesday in its monthly report, raising the specter that hawkish cartel members will push for production cuts at a special meeting next month.

OPEC now believes (pdf) that 2009 global oil demand will increase by 800,000 barrels per day to 87.21 million barrels, compared to the previous forecast of a 900,000 barrel per day rise.

OPEC said its production in September averaged 32.16 million barrels per day, down about 310,000 from August.

Energy prices continue to fall

Energy prices retreated Wednesday on the news. Oil fell $3.44 to $75.21 per barrel. The other major energy commodities also fell in early trading Wednesday, continuing their nearly month-long downtrend. Heating oil fell about 5 cents to $2.20 per gallon, unleaded gasoline declined about 8 cents to $1.80 per gallon, and natural gas fell 7 cents to $6.66 per million BTUs.

In its report, OPEC said that even if governments are successful in unfreezing credit markets, the fallout in the real economy is expected to be considerable. The credit drag, combined with decelerating growth in both developed and developing world economies, will weigh on oil demand throughout 2009. OPEC has called a special meeting for November 18 to address what it argues is an oversupplied global oil market.

Economist Peter Dawson told BloggingStocks on Wednesday that OPEC's October report "makes it more likely that Iran, Venezuela, Libya and other price hawks will push for a production cut." Still, Dawson is sticking with his prediction that the cartel's most influential member, Saudi Arabia, will not cut production, but instead will vote to maintain current production levels until oil falls to the $50 range.

"The focus remains stabilizing the global financial system," Dawson said. "If the Saudis believe a lower oil price is needed to maintain global financial stability, which I believe they do, they will not cut production. The caveat being if oil drops to $50 before the November 18 meeting, and that's not likely. The price of oil is trending lower, but it's not collapsing, and its not likely to, due to the weak dollar, emerging market oil demand."

Oil / Economic Analysis: Economist Dawson added that Iran and Venezuela will likely cut oil production on their own -- or at least state that they will -- but the cuts will have little impact on oil's downward price trend. Moreover, those two price hawks will soon reverse their decision, he said, once they realize their unilateral cuts simply lowers their national oil revenue. Bottom line: oil's price must trend lower to take stress off the financial system and assist the global economic recovery.