The International Energy Agency (IEA) has announced that the global demand for oil will decline by 2.4 million barrels per day (bpd), further giving credence to the consensus that the world’s economy will not recover until 2010.
According to news gathering agency Reuters the IEA stated that such a decline in demand has not been seen since the early 1980s. Consumption has been much lower in both developed and non-developed countries in the first quarter of 2009 than what analysts had previously predicted. At 83.4 million bpd, the world’s demand for oil is a full 1 million bpd lower than expected.Â
As a result of lower demand the amount of stockpiled oil has risen to 61.6 days of forward cover – the highest level since the early 1990s. The optimum level according to the oil cartel OPEC is around 52 days.
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The 12 member nations of OPEC agreed to cut production by 4.2 million bpd in September of last year. So far compliance by OPEC’s members has been around 80%.
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