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.
The agency also slashed its estimate of U.S. oil consumption in 2010 by 160,000 bpd to 19.10 million bpd.
U.S. gasoline demand in the second quarter of 2009 is forecast to reach 9.11 million bpd, up 10,000 bpd from last month’s estimate. For the third quarter the EIA now expects U.S. gasoline consumption of 9.04 million bpd, down 60,000 bpd from the previous forecast.
Separately, the EIA raised its 2009 non-OPEC oil production forecast to 49.83 million bpd, with stronger output than expected in the North Sea, Latin America and Russia in the first quarter. EIA expects 2009 OPEC output to fall to 28.65 million bpd, down from its previous estimate of 28.78 million bpd.
U.S. crude oil prices are forecast to average $52 a barrel in 2009, down about $1 from last month’s estimate, and $58 a barrel in 2010.
“However, a stronger-than-expected economic recovery or lower non-OPEC production (due to low oil prices, financial market constraints, or more aggressive action to cut production by OPEC countries) could lead to a faster and stronger rise in oil prices,” the EIA said.
(Additional reporting by Tom Doggett)
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