Global oil demand forecasts cut on economic slowdown

PARIS, France – Faltering economic growth will undercut global oil demand this year and next, the International Energy Agency (IEA) said Friday, August 10, citing slowdowns in China and the United States in particular.

“Sluggish economic growth could restrict annual oil demand growth to 0.9 million barrels per day in 2012 and 0.8 mbpd in 2013, with demand averaging 89.6 mbpd and 90.5 mbpd,” down from last month’s estimates of 89.9 mbpd and 90.9 mbpd, respectively, the IEA said in its latest Oil Market Report.

The IEA highlighted slower demand in the United States and China, which together account for a third of the global market, while technical changes in its calculations also cut its 2012 forecast by 0.25 mbpd.

The IEA, set up to advise developed countries on energy policy, reduced its 2013 economic growth forecast to 3.6% from 3.8% but left its 2012 estimate unchanged at 3.3%.

The Chinese economy, which has driven demand for oil and other commodities for the past 20 years, was likely to grow 8% this year, instead of 8.2%, rising marginally to 8.1% in 2013, rather than 8.5%.

Chinese data this week bears out that picture, with the government expected to announce fresh stimulus measures to keep growth at around 8%, the minimum necessary to provide enough new jobs to keep unemployment at bay.

The IEA put US growth next year at 2% down from the 2.3% estimate it gave in last month’s report. – Agence France-Presse