IEA reduces oil demand forecasts for 2018, 2019
Baku, Azerbaijan, Oct.12
By Leman Zeynalova – Trend:
The forecast for demand growth in 2018 and 2019 has been reduced for both years by 110,000 barrels per day (b/d) to 1.3 mb/d and 1.4 mb/d, respectively, according to the IEA report.
This is due to a weaker economic outlook, trade concerns, higher oil prices and a revision to Chinese data.
Demand in the countries of the Organization for Economic Co-operation and Development (OECD), supported by a strong 1Q18 and robust US growth, will expand by 300,000 b/d in 2018, slowing to 130,000 b/d in 2019.
“Non-OECD demand will grow by 1 mb/d in 2018, led by China and India, which together account for 60 percent of the global increase,” said the report.
There is no peak in sight for demand, said the IEA. “The drivers of demand remain very powerful, with petrochemicals being a major factor.”
“Rising living standards, particularly in developing countries, are already underpinning strong demand growth for plastics and this will continue for many years to come.It is an extraordinary achievement for the global oil industry to meet the needs of a 100 mb/d market, but today, in 4Q18, we have reached new twin peaks for demand and supply by straining parts of the system to the limit,” said the IEA.
Recent production increases come at the expense of spare capacity, which is already down to only 2 percent of global demand, with further reductions likely to come, according to the report.
“This strain could be with us for some time and it will likely be accompanied by higher prices, however much we regret them and their potential negative impact on the global economy.”
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