THE International Energy Agency (IEA) cut its five-year forecast for worldwide oil demand yesterday, saying consumption won’t return to the same levels as last year until 2012, due to the downturn.<br /><br />In its medium-term oil market report, the body slashed oil forecasts for every year to 2013 by 3m barrels a day. By 2012, consumption will average 86.76m barrels a day, the first time it will go up above 2008’s levels. <br /><br />The global downturn has cut demand for oil, as developed countries cut back and growth in China and India slows.<br /><br />Nobuo Tanaka, executive director at the IEA said in the report that, while the slump in consumption has put off the threat of an oil shortage, risks remain as companies cut spending on oil exploration.<br /><br />The IEA also said it had taken a very conservative view of Iraqi production capacity for 2008/14, despite great international interest in the country’s oil development projects.<br /><br />Iraq has the world’s third-largest proven oil reserves, estimated at 115bn barrels, but its petroleum industry has been devastated by years of war, international sanctions, and political interference. <br /><br />It added that too rapid an oil price rise could derail any economic recovery and consumer countries should seize the moment to improve energy efficiency.<br /><br />“We are watching carefully because if the price moves too fast compared to the economic recovery, it could derail the economic recovery. This is something we are very concerned with,” Tanaka added.<br /><br /><strong>FAST FACTS </strong>OIL MARKET REPORT<br />&9679; Oil consumption won’t return to 2008 levels until 2012, according to the IEA<br /><br />&9679; The IEA is urging consumer countries to seize the opportunity to improve energy efficiency.