The International Energy Agency (IEA) predicts a global decline in oil demand in 2008 because of a sluggish economic growth worldwide.

The figures released by the IEA indicate a 100,000 barrel per day (bpd) decline from the figures predicted by the agency last month during which oil demand increased by 185,000 bpd.

OPEC decided to maintain its production ceiling at 29.67 million bpd in the cartel's March 5 meeting in Vienna.

Assuming Iraq's oil production remains unchanged, the IEA predicts that during the first quarter of 2008, supply shortfall will be 560,000 bpd but will reverse in the second quarter with a surplus of 960,000 barrels.

To maintain balance between supply and demand, OPEC needs to produce 700,000 bpd in the first quarter. The IEA predicted oil prices remain high and once again requested OPEC members increase their output.

Lawrence Eagles, Head of IEA Oil Industries and Markets Division told Reuters that there is little question that dollar depreciation and speculation has contributed to higher oil prices.

He added that OPEC has a surplus of two million bpd and the cost of each barrel of oil for OPEC members is $10.

The IEA criticizes OPEC for maintaining its current output limit and not setting any date for a members meeting before September.