peak oil arrived yesterday....,

Financial Times | Demand for oil will fall this year at the fastest rate since 1982, the International Energy Agency has forecast.

The rich countries’ energy think-tank has again cut sharply its prediction for world oil demand this year, and now expects it to average 84.7m barrels per day, down 1m b/d from last year, because of the steep downturn in the world economy.

This year is expected to mark two successive years of falling demand for the first time since 1982-83.

Fuel demand has ”plummeted” in the US and is falling in many other countries, the IEA said. Even in China, one of the countries that powered the global growth in oil demand up to 2007, the rise in consumption is expected to slow sharply.

However, the IEA also warned that sharp production cuts from Opec, the oil producers’ cartel, would mean that by the end of the year there would need to be a ”substantial” draw-down in oil stocks, unless demand weakens even further, or supply from non-Opec countries turns out to be stronger than expected.

Opec cut its agreed production levels by 4.2m b/d in the second half of last year, and could well cut production again at its next meeting on March 15 in a bid to raise oil prices from this week’s levels below $40.

The IEA’s forecast for oil demand this year is 570,000 b/d lower than it predicted in January, reflecting the sharp deterioration in the assessment of the world economic outlook from the International Monetary Fund.