An economic slowdown in industrialized economies with damper oil consumption growth, but oil high prices are here to stay, the International Energy Agency predicted in its monthly report.

The IEA lowered its forecast for 2008 global oil demand by 80,000 barrels per day to 87.54 million barrels, which would represent a 2% growth in oil consumption from 2007.

Oil hit a record high price of $109.72 Tuesday before settling back to the $108.50-range Tuesday at mid-day. Oil has risen more than 80% in the past 12 months.

Those higher prices are slowing economic activity in industrialized nations that had already started to slow with the weakening of the U.S economy in mid-2007, the IEA said. But strong growth in developing markets, geopolitical tensions, OPEC's status-quo regarding production have offset the above, and sent oil's price higher.

IEA: Oil to remain costly

Meanwhile, oil inventories in industrialized nations covered by the OECD increased by 32.6 million barrels in January 2008 to 2.617 billion barrels or 52.9 days of consumption, which is considered tight spare capacity.

The Organization for Economic Cooperation and Development cut its forecast for 2008 growth in its 30-nation membership to "less than 2%" -- the lowest growth rate since 2003 -- due to fallout from the U.S. economic slowdown, Bloomberg News reported Wednesday.

Sixth months ago, the OCED predicted that 2008 growth in the 30-nation zone would total 2.3%, following 2.7% growth in 2007.

The growth revision marks a substantial shift in OECD expectations. Earlier, the OECD predicted that member economies would be to withstand the U.S. economic slowdown without considerable negative consequence. That outlook, along with economic analysis from other countries, helped form the basis for the so-called 'decoupling thesis' -- where Europe and other developed countries race along unscathed by the doldrums in the world's largest economy.

The Bush administration opposes a United Nations draft proposal calling on developed nations to make binding emissions cuts of 25%-40% by 2020, Bloomberg News reported Monday.

A U.N. draft document will call for industrialized nations to implement those cuts as part of a proposal to replace the Kyoto Protocol, Reuters reported Monday. Representatives from 187 nations are meeting in Bali for global climate talks.

Environmental and international group leaders hope to replace the Kyoto Protocol, which expires in 2012, with the new U.N. agreement, preferably by 2009. The United States is the only developed nation to reject the Kyoto Protocol. U.S. senior climate negotiator Harlan Watson said Monday that the U.S.'s "principal difficulty with having any numbers in the text to begin with is that it might prejudge outcomes,'' Bloomberg News reported.