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.