Azernews.Az

LONDON – The International Energy Agency Wednesday cautioned that world oil demand could take a substantial hit in the months ahead should economic growth falter.

"The short-term global economic outlook is highly uncertain, presenting significant downside risks to future oil demand growth," the Paris-based agency said in its monthly oil-market report.

The global economy is expected to grow by 4.5% this year and ease to 4.3% in 2011 but if growth rates were to stumble by about 30%, world oil demand would be expected to slide by 300,000 barrels a day this year and by a large 1.2 million barrels a day in 2011, the IEA said.

"We stand by our baseline assessment for a recovery in oil demand, but there remains a lot economic uncertainty in the short term and we recognize that," said David Fyfe, head of the IEA's oil markets team. He called the oil-demand projections "what-if" scenarios aimed at simply demonstrating the downside risks.

The IEA, energy advisor to many of the world's largest energy consumers such as the U.S., made slight upward revisions to world oil demand this year and for 2011, but those were based on revisions to historical oil-demand data and on International Monetary Fund forecasts issued nearly four weeks ago. Since that time, economic news in places like the U.S. has become gloomier.

Highlighting that, the U.S. Federal Reserve said on Tuesday after its policy meeting that the pace of economic recovery had slowed in recent months and was expected to be "more modest in the near term" than it had thought. The reserve's latest outlook wasn't worked into the IEA's report Wednesday.