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 In its closely watched monthly survey, the Paris-based agency blamed "the relentless worsening of global economic conditions" for its revision, and said a drop this year would mark the first two-year slide in oil demand since 1982-1983.
The IEA cut its forecast for oil demand this year by 1 million barrels to 85.3 million barrels a day
-- 0.6 percent lower than 2008. Oil demand last year is estimated to have slid 0.3 percent to 85.8 million barrels a day.
The agency, which represents the interests of 28 oil-importing countries, said it lowered its forecast after nearly halving its estimate for global economic growth to 1.2 percent this year.
The agency said it was "forced to anticipate upcoming institutional revisions on the likelihood that the International Monetary Fund and others will shortly cut their forecasts."
In its last monthly report, the IEA had predicted a rebound in oil demand this year on the assumption that developed economies would recover in the second half of 2009.
The report said oil demand in the countries belonging to the Organization for Economic Cooperation and Development is forecast to fall 2.5 percent this year, after a 3.3 percent contraction in 2008. Consumption in the rest of the world will continue to grow this year but at a slower pace, the IEA said.
Non-OECD oil demand will grow 1.8 percent in 2009, down from the 3.7 percent pace in 2008, the IEA said.
Oil prices languished near $35 a barrel in late Singapore trading Friday as investors eyed a weakening U.S. economy and falling global demand that has sent crude down a third since last week.
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