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Energy agency cuts forecast for world oil demand

World oil demand will rise much less than expected in 2008 because of slower economic growth in the United States and other industrialised countries, the International Energy Agency (IEA) said on Friday.

The IEA, adviser to industrialised countries, also pointed to a drop in oil inventories and said oil supply outside the Organisation of the Petroleum Exporting Countries (OPEC) was continuing to fall short of expectations.

Global oil consumption will rise by 1,27-million barrels per day (bpd) in 2008, 460 000 bpd less than the previous forecast, said the Paris-based agency in its monthly Oil Market Report.

The assessment follows the latest outlook from the International Monetary Fund (IMF), which this week issued lower economic growth forecasts, and the impact of record-high oil prices above $110 a barrel.

”The latest GDP projections from the IMF suggest less robust oil-demand growth in the coming months,” the IEA said. ”This report projects April and May oil balances tipping towards a supply surplus.”

The IMF trimmed its 2008 economic growth forecast for top oil consumer the United States to 0,5% from 1,5%.

China, the world’s second largest oil consumer, was also predicted to use less oil than expected. The IEA lowered its estimate for 2008 demand in China by 70 000 bpd, partly because of weather-related effects in the first quarter. — Reuters

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