World oil demand is likely to fall by double the official forecasts this year as the global recession worsens, the chief economist of Total, the French oil company, said on Tuesday. "We forecast a decline of 2 million barrels per day (bpd), which is quite an important decrease and which has a strong impact on the oil market," Pierre Sigonney told a conference in the capital. "It needs very strong cuts from OPEC countries just to stabilise the market."
Oil demand has fallen rapidly as the global economy uses less energy for transport and industry. The Total estimate is substantially more than those put forward by OPEC and the International Energy Agency, which predict oil demand will fall by 1 million bpd and 1.2 million bpd respectively. Lower oil prices have made new drilling projects and development of unconventional crude less economical, and are likely to affect the supply of oil available to the world in the long term, Mr Sigonney said.
Total's forecasts for oil supply available in the next three to five years have been reduced by 4 million bpd, he said. Christophe de Margerie, the chief executive of Total, has warned that oil production is not likely to exceed 100 million bpd in the long term, but the recent delays in new investments may prevent the world from reaching that level, Mr Sigonney said. "We are thinking the plateau will not be 100 million bpd, but maybe lower, because we are delaying new projects," he said.
cstanton@thenational.ae