Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Why Is Demand For Oil So Low? IEA Cuts Forecast

Published 09/12/2014, 09:05 AM
Updated 09/12/2014, 09:15 AM
Why Is Demand For Oil So Low? IEA Cuts Forecast

Why Is Demand For Oil So Low? IEA Cuts Forecast

By Maria Gallucci - The world’s demand for crude oil will grow at a remarkably slower pace this year and next, the International Energy Agency projects. The Paris-based watchdog says it trimmed its growth forecasts again as European and Chinese economies continue to weaken.  

“The recent slowdown in demand growth is nothing short of remarkable,” the IEA said in its September oil market report on Thursday. The agency also cut its forecasts in its August and July reports.

For all of 2014, the agency now expects oil demand to grow by 900,000 barrels per day (bpd), down by 150,000 bpd from earlier projections. For 2015, it reduced its estimates by 100,000 bpd to 1.2 million bpd.

“Euro zone economies, already struggling with stagnation, are getting perilously close to deflation,” according to the IEA, Reuters reported. That could cause “further reductions in economic activity, as market participants delay investment/purchasing decisions.” China is unlikely to see demand grow by much more than 2 percent, the agency said.

© Reuters/Todd Korol. An oil pump jack pumps oil in a field near Calgary, Alberta. The IEA this week trimmed its global oil demand growth forecast for the third month in a row.

IEA analysts said the lower demand growth will help offset some of the drop in production in Iraq and Libya, which have struggled to maintain production, refining and export levels as armed insurgents jeopardize infrastructure and supply routes.

While conflicts in those countries “show no sign of abating, their effect on global oil market balances and prices remains muted amid weakening oil demand growth and plentiful supply” from non-OPEC nations, including the United States, the IEA said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.