World oil demand is shrinking faster than previously thought as a slowing global economy erodes consumption and keeps oil prices under pressure, OPEC said on Wednesday.
The Organization of the Petroleum Exporting Countries said demand would drop by 1.37 million barrels per day (bpd) in 2009 to average 84.2 million bpd. Its previous forecast was for consumption to fall by 1.01 million bpd.
In the coming months, the market is expected to remain under pressure from uncertainties in the economic outlook, demand deterioration and the substantial overhang in supply, OPEC said in its Monthly Oil Market Report.
OPEC, source of more than a third of the world's oil, joins the International Energy Agency and the U.S. government in lowering global oil demand forecasts since last week. Its reduction is less severe than the IEA's.
The IEA, adviser to 28 industrialized countries, said on Friday world oil demand will slide by 2.4 million bpd in 2009, more than 1 million bpd down from its previous forecast.
According to OPEC, demand is falling fastest in the developed nations of the Organization for Economic Co-operation and Development. The global downturn has also curbed previously rapid growth in countries like China and India.
Demand growth in countries outside the OECD has fallen by 90 percent year-on year, OPEC said.
Oil was trading just under $50 on Wednesday after the OPEC report was released, erasing an earlier gain.
The market spiked to almost $150 last July, partly due to expectations of continued strong demand in the developing world.
OPEC has promised to cut 4.2 million bpd, equal to about 5 percent of daily world demand, from its output levels since September to try to support prices. Industry estimates show it has delivered most of the cutbacks.
The group, excluding Iraq, is complying with 83 percent of the pledged curbs, according to Reuters calculations based on OPEC data. OPEC said its production was at 27.9 million bpd in March, down 145,000 bpd from February.
OPEC held its output quotas steady when it last met in March, but called another meeting for May 28 to reassess the market.
Vigilant monitoring is essential to assess the likely developments in the second half of the year and the impact these will have on market stability, OPEC's report said.
(Reporting by David Sheppard; editing by Peter Blackburn/Alex Lawler)