Wed Nov 4, 2009 8:43am IST
SINGAPORE (Reuters) - The International Energy Agency will "substantially" downgrade its long-term oil demand forecast in its annual energy outlook next week, the second cut in a row, the Wall Street Journal reported on Wednesday.
Efforts to better manage expanding oil demand in the developed world have been more effective than first expected, the paper quoted a person familiar with the report as saying. It did not give any estimates on how deep the cut might be.
While the IEA's outlook is unlikely to affect the prevailing short-term view that the global economy's recovery from recession is reviving oil use, it is an important gauge for oil companies considering whether to build refineries or drill new wells.
The IEA and other analysts have repeatedly warned that a failure to make sufficient investments now could lead to another supply crunch in the next decade, particularly as economic growth in energy-intensive developing nations revives, but some are also growing increasingly bearish on the outlook for demand.
"The rise in global oil consumption over the next 10 years could be minimal," the paper quoted Philip Verleger, a veteran independent energy economist based in Colorado, as saying, noting that new energy-efficiency standards for everything from vehicles to building codes will help keep a tight leash on demand.
In last year's World Energy Outlook the IEA cut its annual oil demand growth forecast until 2030 from 1.3 percent to 1 percent on the basis of higher prices and slower economic growth.
It also shaved 10 million barrels a day off its long-term forecast, projecting consumption in 2030 would hit 106 million barrels a day, or about 25 percent above current levels. The Journal said it wasn't clear yet how that compares with the cuts expected in this year's forecast by the IEA.
(Reporting by Jonathan Leff; Editing by Sanjeev Miglani)
(For more news on Reuters Money visit www.reutersmoney.in)