The developed world's demand for oil will not recover from the effects of global recession for another four years, the cartel of producing nations predicted yesterday.
Consumption will rise slower than expected over the short- and medium-term, the 13-strong Organisation of Petroleum Exporting Countries (Opec) says in a report.
Global demand will drop to 84.2 million barrels per day (bpd) this year – compared with 85.6 million bpd in 2008 – only recovering to last year's levels by 2011. By 2013 it will still be at 87.9 million bpd, 5.7 million bpd less than previously thought. But for OECD countries, the outlook is more depressed. Demand will drop from last year's 47.5 million bpd to just 45.5 million bpd in 2010, and remain stagnant until 2013, Opec says.
"At present, despite the bold fiscal and monetary intervention from governments, global economic conditions remain gloomy," Abdalla Salem El-Badri, Opec's secretary general, said.
Longer term forecasts have also been revised down. By 2030, global demand for Opec oil will hit 106 million bpd, 7.7 million bpd – or roughly the daily consumption of China – lower than previous forecasts. Growth will come from developing countries, their consumption rising by 23 million bpd between 2008 and 2030.
Despite Opec countries' income from oil and gas exports topping $1 trillion (£623bn) last year thanks to a record barrel price of $147, 35 projects have been postponed because of the recession, representing about five million bpd. Opec predicts investment levels to 2013 will drop by about $45bn.
Mr Al-Badri described the current $60-plus oil price as "comfortable", but still below the $75-plus Opec says it needs to secure investment.
London Brent Crude slipped below $63 yesterday but the price has more than doubled this year, peaking at nearly $72 last week and rising faster in May than at any time for a decade. Against a background of dismal fundamentals, the rises have prompted renewed claims that speculators are skewing the market.
Gordon Brown and Nicolas Sarkozy, the French President, will be using this week's G8 summit to drum up support for calls for stricter curbs on future markets. They also want oil producers to agree a target price range based on long-term estimates of fundamentals but the proposal is likely to gain little traction with Opec.Reuse content