PARIS: The world may escape an oil supply crisis for the next five years because a slow recovery from the economic downturn would hold down growth of demand, the IEA said on Monday.

The International Energy Agency (IEA) slashed its mid-term estimate for world oil demand, which it said may now rise by an average 0.6 per cent a year in 2008-14, down sharply from its forecast of 1.6 per cent growth made last year.

СRelative to the medium-term profiles presented in previous years, this scenario paints a delayed picture of threatened Сsupply crunchТ later in the projected period,Т it said in its Mid-Term Oil Market Report.

That forecast was based on a world growth estimates by the International Monetary Fund. The IEA also provided a model based on a less optimistic forecast, according to which demand could actually decline.

СWhether we end up facing a supply crunch again by mid-decade, or with a more comfortable buffer of supply flexibility, depends largely on the pace of economic recovery and government action on efficiency,Т the IEAТs director Nobuo Tanaka said in a statement.

The IEA, the energy-monitoring arm of the 30-nation Organisation for Economic Cooperation and Development, had warned in April that a sudden easing of tension on the oil market, and rapid price fall, had crimped long-term investment in new fields for the day when demand recovered.

Under the most optimistic scenario, demand could reach 88.99 million barrels a day, from 85.76 million in 2008.

The price of oil had rocketed to $147 a barrel in July 2008 before plunging to around $32 in December. It has since recovered to nearly $70.

The IEA also said that Сfor the first time in 50 years, the world will witness a drop in global gas demand.ТЧAFP