World oil demand is slowing down, at least for the moment. Record high prices have dented consumption.
The International Energy Agency, the IEA said demand will rise at its slowest pace in six years during 2008. In its monthly report, the IEA said global oil consumption will now increase by 800,000 barrels per day, that’s 230,000 barrels less than its previous forecast.
The IEA warns the lull in oil demand growth may only be temporary as strong economic growth remains the key driving force. Rising prices have forced several Asian countries to trim subsidies on domestic fuel in recent weeks.
Escalating reaction against the cost of fuel has sparked an appeal for calm from OPEC Secretary General Abdullah al-Badri. He said the oil price is unbearable and does not reflect any shortage of supply in the market.
The IEA report says the high cost of oil is contributing to inflationary pressures. It is also forcing airlines to cut flights and ground aircraft and inducing motorists to drive less and buy more fuel-efficient vehicles.