Global oil demand expected to drop 1.2 percent

The world's demand for oil is expected to fall 1.2 percent in 2009, which would be the biggest annual decline in 27 years, according to The Wall Street Journal.

The decrease in oil consumption has been credited to recessions in the U.S. and other countries.

"We seem to be on a downward escalator we can't get off of," says David Fyfe, head of the International Energy Agency’s (IEA's) Oil Industry & Markets Division. "Until we see a bottoming out and degree of stability on the financial and economic side, energy market weakness is going to be with us for some time."

Although the decreased demand indicates consumers should see lower gasoline prices, the Organization of the Petroleum Exporting Countries' plans to cut oil consumption actually could lead to higher gasoline prices. IEA predicts global oil consumption will drop to 84.7 million barrels per day in 2009, which is a decline of 1 million barrels per day from 2008.

U.S. oil demand is expected to drop 2.9 percent to 19 million barrels per day. China is expected to have an oil-demand growth rate of 0.7 percent—its weakest in nearly 20 years.

Date : 2/17/2009