World oil demand growth will return in 2009 after shrinking this year for the first time since 1983 due to the global economic slowdown, the International Energy Agency (IEA) said on Thursday.
The IEA's view is in stark contrast to the U.S. Energy Information Administration, which on Tuesday said demand is expected to shrink by 450,000 bpd in 2009 following a predicted 50,000 barrel decline in 2008.
In its monthly report, the IEA cut its 2008 oil demand estimate by 350,000 barrels per day (bpd) to 85.8 million bpd — a 200,000 bpd year-on-year fall.
The adviser to 28 industrialised countries sees demand rebounding to 86.3 million bpd in 2009, based on the International Monetary Fund's assumption the global economy will gradually recover in the second half of the year.
"Our working scenario rests on assumed resilience outside of the Organisation for Economic Co-operation and Development (OECD) regions, albeit with slower growth than in the past five years," the IEA said in its monthly report.
"This month's report saw scant amendment to recent non-OECD demand data (in contrast to the OECD), and therefore we resist the temptation to jettison growth for 2009, despite weaker economic indicators in some cases."
As demand drops in the current economic slowdown, oil inventories in OECD countries have risen sharply.
Stocks at the end of October equalled 56.8 days of demand — well above the five-year average, the IEA said.
The IEA said there would likely be lower demand for crude oil from the Organization of Petroleum Exporting Countries (OPEC) in 2009.
"Our own supply and demand balances suggest a lower 'call on OPEC' in 2009 at 30.7 million bpd, versus 31.5 million bpd in 2008," the IEA said.
OPEC is expected to cut output by at least 1 million bpd when it meets in Algeria on Dec. 17, as the producer group tries to shore up prices which have dropped to about $44 a barrel — more than $100 below an all-time high above $147 hit in July.
David Fyfe, head of the IEA's Oil Industry and Markets Division said the agency's forecast still demonstrated global economic weakness in 2009.
"It's marginally higher growth from a lower base," Fyfe said.
"Less than half a million barrels per day of demand growth still indicates a weak market in 2009."
The IEA said non-OECD demand could be revised lower if more pessimistic economic forecasts are borne out.
Oil prices were higher after the IEA report was released. U.S. crude was up 91 cents at $44.43 a barrel at 0912 GMT.
