Energy Dept. and IEA Lower Oil Demand Outlook

Energy Dept. and IEA Lower Oil Demand Outlook

The Energy Department and the Paris-based International Energy Agency both lowered their global oil consumption forecasts for this year amid surging prices, but said demand for oil and petroleum products is accelerating in parts of the developing world.

In its monthly short-term Energy outlook, the Energy Department’s Energy Information Administration said oil consumption is falling more than expected in the industrialized world. Consumption in Organization for Economic Cooperation and Development (OECD) member nations, such as the U.S. and countries in Western Europe, is now expected to fall by 240,000 barrels a day this year. Last month the department forecast consumption would be unchanged from 2007 levels.

In its own monthly report, the IEA cut its demand growth forecasts, projecting that global demand for petroleum products such as gasoline, diesel and heating oil will grow by 0.9 percent, or 800,000 barrels a day, in 2008 — down from the 1.2 percent, or 1 million barrels, the IEA forecast earlier this year.

The Energy Department and IEA also said demand for oil and fuel continues to grow in the developing world, especially China.

On the home front, the Energy Department now expects gasoline prices to peak at a monthly average of $4.15 a gallon in August. Last month, the department forecast prices would peak at $3.73 a gallon in June.

The department also raised its average oil price projection for 2008 to $122 a barrel from a forecast of $110 a barrel last month.

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