World '09 oil demand growth cut by 140,000 bpd - EIA

By Tom Doggett

WASHINGTON (Reuters) - The "deteriorating" global economy will slash world oil demand growth next year by 140,000 barrels per day, the U.S. Energy Information Administration said on Tuesday in its latest projection.

With pronounced weakness in U.S. oil consumption, the agency could slash projections further after taking into account the latest economic forecasts as the world struggles with a spreading credit crunch and a market sell-off.

"If we were to incorporate the more recent and evolving forecasts, as we will, you could make the argument that demand would be somewhat weaker than we anticipate," Howard Gruenspecht, the EIA's acting administrator, told reporters.

He said the EIA would likely revise downward economic growth estimates in its November forecast, which will result in even lower petroleum demand and energy prices.

Global oil consumption was forecast to average 86.92 million bpd in 2009, about 780,000 bpd more than this year's demand, but 140,000 bpd less than the agency had forecast just last month.

This year world oil use was projected to rise by only 330,000 bpd, about 340,000 bpd lower than EIA's projections last month.

"The current slowdown in economic growth is contributing to the recent decline in oil demand," EIA said in its latest forecast.

U.S. Federal Reserve Chairman Ben Bernanke said on Tuesday that the outlook for economic growth has worsened. He said the economy was poised for subdued growth during the remainder of this year and into 2009.