Global oil demand to grow slowly next year: IEA
The International Energy Agency (IEA) has released its new report on world’s energy outlook, saying that the global demand for crude oil is expected to be slow in 2016.
The report, released on Tuesday, said the slowdown in global oil demand would be a result of more pessimistic outlook for the global economy, as a result of which the international crude market will continue to be oversupplied.
"Global demand growth is expected to slow from its five-year high of 1.8 million barrels per day in 2015, to 1.2 mb/d in 2016," moving closer toward its long-term trend, AFP quoted the IEA’s monthly report as saying.
Based on the report, the slowdown in the global demand will probably keep the international market in a state of oversaturation, especially with the expected arrival of Iranian crude.
"A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels … are likely to keep the market oversupplied through 2016," it added.
Citing the International Monetary Fund's recent downward revisions on global growth estimates by one-fifth of a percentage point, the report added that "projections for commodities demand logically require some trimming."
The IEA noted that global crude consumption is also expected to stand at an average 95.7 million barrels a day next year, down by 100,000 barrels per day compared with estimates provided in the IEA’s report last month.
The report stated that one surprise expected next year is the resilient oil demand in China despite its economic slowdown.
"Our preliminary August estimate posted a near double-digit percentage point gain in year-on-year terms despite the otherwise ailing macroeconomic backdrop," the Paris-based agency said.
Crude oil prices were relatively stable in September and rallied early this month on "expectations of a lower US output and rising tension in the Middle East," the IEA said.
Oil prices, however, dropped on Tuesday following the IEA's latest forecast. As a result, Brent North Sea crude for delivery in November shed 13 cents to stand at USD 49.73 per barrel in afternoon London deals.
Meanwhile, US benchmark West Texas Intermediate for delivery in November lost 26 cents to hit USD 46.84 per barrel compared with Monday's close.
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