OPEC sees oil demand growth slowing in 2008, 2009

By Alex Lawler

LONDON (Reuters) - OPEC on Tuesday cut its forecast for global oil demand growth in 2008 for a fourth time this year and said consumption would slow in 2009, signaling a more comfortable supply and demand balance.

The Organization of the Petroleum Exporting Countries also said the need for its oil in 2009 would show the first significant decline since 2002 due to slower demand and rising supply from non-member countries.

"Market fundamentals have clearly been softening," OPEC said in its Monthly Oil Market for July. "This trend in fundamentals is expected to continue -- and even gather pace -- into the coming year."

OPEC's outlook adds to evidence that record-high oil prices are slowing demand in the industrialized world and follows other forecasts that a strain on supplies may ease in 2009. Oil hit a record $147.27 a barrel last week.

Demand will rise by 1.03 million barrels per day (bpd) this year, 70,000 bpd less than the previous forecast, the report by OPEC economists said. The previous reductions were in June, May and February.

In its first look at 2009 in the monthly report, OPEC said world consumption would rise by 900,000 bpd next year while supply from non-member countries would expand at a faster rate of 940,000 bpd.

China will make the largest contribution to world demand growth in 2009 while consumption in members of the Organization for Economic Co-operation and Development (OECD) is expected to fall, OPEC said.

This year, a drop in demand for fuels such as gasoline in the United States due to high prices and the slowing economy is expected to weigh on consumption, despite growth in China, India and the Middle East.