Oil Slides Into Its Own Recession

A weak global economy is dragging oil consumption down for the first time in 25 years
By Jim O'Neill,  Newser User
Posted Dec 11, 2008 9:13 AM CST
Oil workers work on a new well Friday, Dec. 5, 2008, in the desert oil fields of Sakhir, Bahrain.   (AP Photo/Hasan Jamali)
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(Newser) – Oil is officially entering a recession of its own, as a foundering global economy has caused the first reduction in consumption in a quarter-century, the Wall Street Journal reports. The International Energy Agency estimates that 2008 demand for oil will finish down some 300,000 barrels a day, the first decline since 1983.

The IEA also said excess production capacity is at its highest level in 6 years, with oil inventories significantly above their 5-year average. "The consumption numbers have just been coming in dramatically weaker,” says the IEA’s analyst. Still, the IEA expects demand to climb a half-percent in 2009.