"Oil demand growth in 2005 looks set to be little more than a third of the growth seen in 2004 and high oil prices have been felt by final consumers this year in a way that they were not last year," the influential report said.
"A possible weakening of global economic growth, and fears that high energy prices are beginning to have an impact both on inflation and on energy consumption, have led to a shift in market sentiment away from a belief that oil prices will continue to rise inexorably."
The CGES predicted that the pace of oil demand growth would slow in 2006 to 1.1 million barrels per day (mbpd), or 1.3 percent. That compared with the International Energy Agency's growth forecast of 1.75 mbpd or 2.2 percent.
Although global oil demand growth would remain weak in 2006, it would still outstrip production of non-Opec countries including Russia and the United States, which is estimated by the CGES at 0.75 mbpd.
The report added that "crude oil prices are being kept high by a lack of spare (refining) capacity to produce low-sulphur distillates and will remain so until this bottleneck is eased".
The Organisation of Petroleum Exporting Countries - producing more than one third of the world's crude supply - would "have little difficulty in keeping oil prices above 50 dollars per barrel", the CGES said. But the oil cartel would "probably have to cut output to do so", unless growth in global demand rebounds.
Oil prices slipped below 60 dollars per barrel again in New York earlier Monday, while London Brent crude futures held at around 57 dollars per barrel.
Should non-Opec crude output grow by less than 0.75 mbpd, as predicted by the CGES, but demand rise by 1.75 mbpd, as forecast by the IEA, then prices could smash new records "with 80-dollar Brent by the end of 2006".
"On the other hand, if demand growth is slower, as the CGES expects, and non-Opec supply increases at about the same pace then Opec will need to cut output" to prevent Brent crude slumping to 37 dollars by the end of 2006.
The 11-member Opec cartel produced 30.34 million barrels per day on average during September, an increase of 130,000 barrels a day from August, according to the latest data.
The supply situation would improve in 2006, the CGES said, with Opec forecast to expand capacity by more than 1.3 mbpd during 2006.