World 2009 oil demand seen lowest since 2004 - EIA

By Ayesha Rascoe

WASHINGTON (Reuters) - Despite rising optimism about the economy, the U.S. Energy Information Administration on Tuesday again slashed its forecast for 2009 world oil demand, lowering its estimate by 420,000 barrels per day to 83.67 million bpd, which would be the lowest level in five years.

The EIA said it expects world oil demand to fall by 1.8 million bpd this year from 2008's levels as consumption remains weak because of the global economic downturn.

Its projection would place global oil consumption at the lowest level since demand was 82.41 million bpd in 2004.

With crude oil prices up to around $60 a barrel due to some positive economic indicators, many energy analysts and traders were anticipating that the EIA would not make another major cut in its oil demand forecast.

The agency said, however, that "expectations of global economic recovery and a resultant increase in demand were offset by initial data for the first quarter showing high oil inventories, weak consumption, and higher-than-expected production."

The EIA has cut its estimate for 2009 global oil demand in 13 of its last 16 monthly forecasts.

The EIA still expects world oil demand to rise in 2010 as the economy rebounds, but lowered its forecast 830,000 bpd to 84.39 million bpd.

In the United States, the world's largest petroleum consumer, the EIA cut its forecast for oil demand this year by 140,000 bpd to 18.85 million bpd.