IEA lowers its growth forecast in oil demand for 2018 2019

15 October, 2018, 00:56 | Author: Eric Barnett
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The estimated growth in global demand has been reduced by 110,000 barrels per day for each of the two years.

As for 2019, Atkinson said an oversupply "is possible" but the outcome of Iran and Venezuela would have to be determined: "A lot could happen between now and 2019".

Oil stockpiles in the world's biggest economy are swelling amid International Energy Agency warnings about growing threats to global energy demand.

The world oil market report noted that OPEC had increased production by 735,000 barrels per day since May as ME Gulf producers such as Saudi Arabia and the UAE compensated for the rapidly declining output in Iran and Venezuela. U.S. crude was down 3.6 per cent on the week, while Brent crude fell 4.1 per cent.


The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast of global demand growth for oil next year for a third straight month, citing headwinds facing the broader economy from trade disputes and volatile emerging markets.

"We look at the fundamentals, and at the moment there is plentiful supply, and at the moment we have seen a modest downgrade to demand growth, and we think the likelihood is that if we are to change our demand outlook for 2019, it's more likely to be the downside than the upside". The revision also reflected changes in the way the agency assesses Chinese consumption. Earlier this week, the Energy Information Administration boosted its forecast for USA oil production , which added another headwind. "In fact, production has surged, led by the United States shale revolution, and supported by big increases in Brazil, Canada and elsewhere", the IEA said in a statement published on its website Friday.

China, which is the biggest importer of crude oil is now replacing Venezuelan crude with Canada's sluggish heavy crude.

For energy importers, the squeeze in supply is stoking inflation, while climbing USA rates lure funds from their markets. New data for OECD stocks show that in August they increased by a more- than-normal 16 mb and have been relatively stable for several months after falling significantly following the implementation of the original Vienna Agreement. Recent production increases come at the expense of spare capacity, which is already down to only 2% of global demand, with further reductions likely to come.

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