Oil demand to fall for first time in 25 years: energy agency

The International Energy Agency is predicting global oil demand will shrink in 2008 for the first time in 25 years as rich economies sink into recession and growth slows in developing countries.

The Paris-based agency is also cutting its forecast for global oil demand next year.

In its closely watched monthly oil market report released Thursday, the agency says the world will have consumed 85.8 million barrels of oil a day this year.

That is 350,000 barrels a day less than the agency forecast last month.

In percentage terms, oil demand in 2008 is expected to drop 0.2 per cent from 2007. The agency says that would represent the first drop in demand since 1983.

Meanwhile, oil prices edged higher Thursday morning on hope for a significant OPEC production cut next week.

Light, sweet crude for January delivery was up 59 cents to $44.11 US a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore.