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IEA: Oil demand will continue to fall
An oil rig overlooking Taft, Calif.
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TEXT OF STORY
Bill Radke: So there are fewer cars on the railroads. Well, same for the asphalt roads. With Americans driving less and businesses paring back, the price of oil has slipped back under $50 a barrel this morning. Oil's been falling since the International Energy Agency forecast lower demand last week. Marketplace's Stephen Beard reports from London.
Stephen Beard: Stockmarkets have been rising on the back of growing optimism about the global economy. But the International Energy Agency takes a gloomier view.
The IEA predicts that the global recession will cut oil demand further this year. They forecast a drop in demand of 2.4 million barrels a day to 83.4 million.
Nick McGregor is an oil analyst with brokers Redmayne Bentley:
Nick McGregor: Effectively it's a vote of no confidence in the chances of economic recovery in the second half of this year. They're really saying now that they think that consumption won't pick up until 2010.
And he says there's another factor pushing crude prices lower on the supply side of the equation. Non-OPEC countries -- Brazil and Russia -- have been pumping like mad. And that's undermined OPEC's effort to prop up oil prices by cutting production.
In London, this is Stephen Beard for Marketplace.
