U.S. sees lower oil demand in Asian states due to crisis

U.S. sees lower oil demand in Asian states due to crisis

WASHINGTON (Reuters): Due to the economic crisis in Asia, the U.S. Department of Energy Friday reduced its monthly forecast for oil demand this year in Asian countries -- excluding China and Japan -- by 300,000 barrels to 9.1 million barrels per day.

In addition, the DOE lowered its 1999 forecast for oil demand in the region by 500,000 barrels to 9.5 million barrels a day.

The revised projections were contained in the monthly short- term energy update put out by the DOE's Energy Information Administration.

"While we do expect a substantial reduction in the growth of oil demand in... Asia, oil growth in the region in 1998 and 1999 should remain positive," the DOE said.

The DOE said the decline for oil demand in Asia would have been greater if counties like India, Pakistan and Taiwan -- which represent one-third of the region's oil demand -- had suffered the same economic problems as Southeast Asian countries.

Separately, the DOE reduced its estimate for the world price of oil this year to an average $15.15 per barrel from last month's estimate of $16.73. The DOE also cut its forecast for the 1999 average world oil price to $15.38 per barrel from $17.51.

The lower oil price reflects increases in world petroleum inventories, the DOE said. World oil supplies experienced an estimated buildup of 600,000 barrels a day last year, and should increase another 400,000 barrels per day in 1998, and another 300,000 barrels a day next year, according to the DOE.

"However, despite the current tilt toward excess supply, with the emerging supply/demand picture yielding increasingly smaller annual stock builds over the forecast period, we do not envision world oil prices dropping much below $15 per barrel for any significant amount of time," the DOE said.