The International Energy Agency (IEA) said that demand for oil is set to fall at the fastest rate since 1982. World demand is expected to be about 84.7 million barrels per day. This is the second successive year of falling demand since 1982-83. Even in China, where demand has been rising steadily, it is expected that consumption will fall off sharply this year.
However, the IEA warned that if there is a substantial draw down of stocks, prices could be higher by the end of the year.
OPEC cut its production levels by 4.2 million barrels per day in the second half of last year and could cut production again at its March meeting.
The IEA's forecast for this year is 570,000 barrels per day lower than predicted in January. The sharpest revisions in demand come from Germany and Japan. Consumption of naptha, used in the manufacture of plastics, "virtually collapsed" in Germany and fell "off a cliff" in Japan.
As demand drops, so too does planned investment in increasing and sustaining production. Some projects have been put on hold or are facing indefinite delays. When demand picks up, it could send prices soaring again. It seems that we have a small window to convert to "green technology" as soon as possible.
What are your thoughts on this problem?
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Reader Comments (Page 1 of 1)
2-12-2009 @ 10:08AM
Frank Gianino said...
oil down. price at the pump up ? can they just fix it. treat the people fair.
2-12-2009 @ 10:36AM
giz said...
part of the stimulus package should be several factories whipping out windmills. every city in every state should have them on every corner. no need for oil- plenty of free energy from the wind. free is free. we should demand it. we should be planning on all electric cars soon and stop all of the imports of gas and oil. that seems like it would turn the tables on our imports fast.