The International Energy Agency (IEA) yesterday cut its oil demand growth forecast for this year to its lowest rate in percentage terms since 1993, citing economic weakness and "a spiralling liquidity crisis".

It reduced its 2008 growth forecast by 250,000 barrels per day (bpd) compared with its previous monthly report to 440,000 bpd and lowered its 2009 prediction by 190,000 bpd to 690,000 bpd.

The Paris-based agency, which represents 28 industrialised nations, has so far pared around half a million bpd from its 2008 global demand estimate and 400,000 bpd from its 2009 estimate.

The impact of global economic weakness is most acute in developed countries and developing economies are showing "a degree of resilience," it said.

"Although non-OECD slow-down is also likely, it is by no means certain that growth will be choked off altogether. We have yet to see unambiguous evidence of a sharp slow-down in China, while Middle Eastern demand growth remains robust."