OPEC sees 'devastating contraction' in oil demand
OPEC [Image] again revised down its estimate for world crude demand on Wednesday, saying a "devasting contraction" in consumption would keep prices under pressure in the months ahead. "In the coming months, the market is expected to remain under pressure from uncertainties in the economic outlook, demand deterioration and the substantial overhang in supply," the Organization of Petroleum Exporting Countries wrote in its latest monthly report. It said "vigilant monitoring is essential" ahead of the cartel's next meeting at the end of May at which some members are expected to push for further output cuts to help support prices. "Oil demand is suffering more and more from the world economic recession," it said, saying this had resulted in another downward revision in its forecast for demand this year of 0.4 million barrels per day (bpd). OPEC estimated that demand would contract by 1.37 million bpd or 1.6 percent in 2009. In its previous monthly bulletin released in March, OPEC had been pencilling in a contraction of 1.01 million bpd for 2009. "World oil demand is already out of its high demand seasonality achieving nothing but devastating contraction," OPEC said.

They think a projection of 1.6% decline is devastating?Just wait as America continues to refuse to spend on anything. The more they cut production and the higher the price goes, the more we stay home. This economic fiasco has broken thru a threshold, I think.