Global oil demand growth is slowing at a faster pace than initially predicted, and supply will continue to outpace demand at least through the first half of next year, the International Energy Agency (IEA) said in a report.
“Our forecast in this month’s Report suggests that this supply-demand dynamics may not change significantly in the coming months. As a result, supply will continue to outpace demand at least through the first half of next year. Global inventories will continue growing: OECD stockpiles in July smashed through the 3.1 billion barrel wall. As for the markets return to balance – it looks like we may have to wait a while longer”, the IEA said.
Oil demand growth slowed from a robust 1.4 million barrels per day in the second quarter to a two-year low of 800,000 barrels per day in the third quarter, the report said.
“Despite oil collapse and resulting investment cuts, global oil production is still expanding although nowhere near the breakneck pace of 2015”, the IEA said.
The loss has been more than made up for by OPEC, the agency said. Saudi Arabia and Iran have each raised oil output by over 1 million barrels per day since late 2014 when OPEC shifted strategy to defend market share rather than price.
The IEA has worsened its forecast for global oil demand growth in 2017 to 97.3 million barrels per day from 97.5 million barrels projected in August. The forecast for 2016 was cut to 96.1 million barrels per day from 96.3 million barrels per day. (Prime/Business World Magazine)