OPEC Cuts Projection for World Oil Demand

OPEC on Wednesday cut its forecast for world demand for its crude in 2009 ahead of a meeting next month of the producer group that is expected to consider output cuts in a bid to prop up oil prices.

In a monthly report the Organization of the Petroleum Exporting Countries said it expected 2009 demand for its crude of 31.14 million barrels daily.

That is a downward revision of 190,000 bpd from last month's report and 870,000 bpd less than its estimate of demand for OPEC crude in 2008.

OPEC output in September averaged 32.16 million bpd, down 310,000 bpd on the month.

The OPEC report would imply that the group would need to reduce output by 1 million bpd from September production levels to meet average demand next year -- although seasonal demand normally runs higher during the northern hemisphere winter.

OPEC ministers have called an emergency meeting for Nov.18 following the fall in oil prices from July's record $147 as investors raced to deleverage across financial markets and as the outlook for global economic growth darkened.

U.S. crude traded at just over $77 on Wednesday.

The report said: "Even if governments are successful in calming equity markets and unfreezing credit markets in the near future, the fallout on the real economy from financial market headwinds is expected to be considerable. This comes on top of the already visible weakening of OECD economies and a deceleration of growth in emerging markets."

OPEC says its forecast was based on world economic growth slowing to 3.8 percent this year and 3.3 percent in 2009.

OPEC cut its projection for world oil demand growth both this year and next but also said additional supplies from non-OPEC producers were not reaching levels previously expected.

The report:

• cut 2009 forecast for world oil demand by 100,000 bpd to growth of 800,000 bpd
• cut 2008 forecast for world oil demand growth by 330,000 bpd to growth of 550,000 bpd
• cut forecast for 2009 non-OPEC supply growth by 110,000 bpd to growth of 800,000 bpd
• cut estimate of 2008 non-OPEC supply growth by 200,000 bpd to growth of 310,000 bpd

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