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IEA Warns Of Weaker Oil Demand On High Prices
By Spencer Swartz
LONDON (Dow Jones)--The rate of global oil demand growth is expected to be weaker this year, the International Energy Agency warned Tuesday, in a report pointing to the impact of oil prices on consumers and industrial users, especially in parts of Asia.
"I believe (the report) indicates that 4.5%-5.0% gross domestic product growth rate forecasts look too high, and it makes it harder to justify support for $60 oil," McMahon said.
In its widely-watched monthly report, the Paris-based IEA cut its oil demand growth forecast for 2006 by 16% to 1.49 million barrels a day from 1.78 million b/d a month earlier.
The new forecast is bound to unnerve the Organization of Petroleum Exporting Countries just days after the 11-nation producer group decided unanimously to maintain its quota production ceiling at a 25-year high. (emphasis mine)
Originally posted by bigx01
opec really doesn't want prices to fall below $50. even with the high prices last year the economy wasn't hurt as bad as it would have been in the early 80's.
you may see opec on paper cut production