World demand for OPEC's oil may take years to recover from the slump in 2009 because of economic weakness and demand destruction, the group said today, justifying its slower spending on new supplies.
In its 2009 World Oil Outlook, the Organization of the Petroleum Exporting Countries said consumption of its crude would not return to 31 million barrels per day (bpd), the level it averaged in 2008, until 2013.
"We have this recession and the financial crisis going on so this has really affected demand," OPEC Secretary General Abdullah al-Badri told a news conference at the group's Vienna headquarters.
"I hope this will bottom out in 2009," he said, "and then the demand will pick up afterward."
The 12-member exporter group joins other forecasters, such as the International Energy Agency, in predicting lower long-term demand. OPEC also said it needed to spend less on developing new supplies, a prospect that may dismay oil consumers.
Oil hit a record high near $150 a barrel in July 2008, the day after OPEC issued its last report. It collapsed to $32.40 by December and is now trading around $62, boosted from its low in part by OPEC supply cuts agreed last year.
In its 277-page report, OPEC predicted world oil demand would rise much more slowly than previously expected over the medium and longer term, although supplies would also be lower.
By 2030, OPEC expects world consumption to reach 105.6 million bpd, a reduction of 7.7 million bpd - roughly equal to current demand in China, the second-largest oil consumer.
In the medium term, consumption will fall to 84.2 million bpd this year from 85.6 million bpd last year, and rise to 87.9 million bpd by 2013. The 2013 figure is 5.7 million bpd less than previously expected.
"The high prices observed in 2008 led undoubtedly to some demand destruction, and this has been factored into short-term figures," the report said.
This year's "reference scenario" is based on the assumption the economy will have hit the bottom by the end of 2009 and begin to recover next year.
Growth would gain momentum in 2011 and by 2012 would be "back to trend values," OPEC said.
Reuters