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 Staff
Posted Dec 11, 2008 9:13 AM CST
Oil Slides Into Its Own Recession
Oil workers work on a new well Friday, Dec. 5, 2008, in the desert oil fields of Sakhir, Bahrain.   (AP Photo/Hasan Jamali)

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.
(More financial crisis stories.)

Get the news faster.
Tap to install our app.
X
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.

X