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According to Bloomberg, global demand growth for oil will be 47 per cent lower this year than initial forecasts because of declining consumption in the US and slowing world economies.

Citing the latest Lehman Brothers report, demand may grow by 790,000 barrels a day this year compared with an estimate of 1.5 million made at the start of the year.

The report said the International Energy Agency had reduced its forecast to 1.03 million barrels from 2.11 million.

Prices of oil futures also fell 11 per cent last week, the sharpest drop in more than three years, on signs of slowing global economic growth and faltering US fuel demand.

In other words, Americans are driving less because of weakening income growth and rising inflation.

"High prices and lower economic growth have driven oil demand in the US lower,'' Edward Morse said in the Lehman Brothers report, adding, "Over the first half of the year, US oil demand surpassed all negative expectations.'"

Slower growth reflects the demand elasticity of oil as prices approach $150 per barrel. Chuchit Bunyaketu, the former managing director of Thai Oil, one of the country's largest oil refineries, also predicted similar effects on demand in Thailand.

Once the crude oil price tops $150 per barrel, consumers will seriously reduce consumption. Chulchit suggested that Sunday be designated as a car-free day for Bangkok's innermost areas so that people are compelled to use buses, taxis, the Skytrain, the subway and other forms of public transport at least one day per week.

Given the unrelenting rise in petrol prices, which have more than doubled over the past few years to over Bt40 per litre for both petrol and diesel, Thai motorists appear to have cut down on unnecessary travel by private vehicles on both weekdays and weekends.

Rush hours in the mornings and evenings are now shorter than before while the average speeds on motorways, expressways and local roads are all slower as slower speed means lower fuel consumption.

In the US, it was also reported that cumulative vehicle miles travelled domestically have been down 2.1 per cent this year as petrol, which makes up almost half of US demand, rose to a record average of $4.10 a gallon.

"Not only are Americans driving less but they are doing so with more efficient cars,'' Morse said, adding: "Luxury pickups and sport-utility vehicles represent 12-13 per cent of seasonally adjusted sales, down from 18 per cent last year.''

The overall demand for petroleum products in US fell by 2.2 per cent, the report said, citing weekly data. Demand for distillates, jet fuel and fuel oil fell by 1.8 per cent, 2.7 per cent and 14.3 per cent respectively.

However, China and India continued to consume more oil driven by electricity shortages and fuel substitution, the report said.