Oil de­mand growth to slow next year

Enterprise - - International News -

The world’s de­mand for oil is ex­pected to slow in 2016 in re­sponse to a more pes­simistic out­look for the global econ­omy, likely keep­ing the crude mar­ket over­sup­plied, the In­ter­na­tional En­ergy Agency (IEA) said.

“Global de­mand growth is ex­pected to slow from its five-year high of 1.8 mil­lion bar­rels per day in 2015, to 1.2m bpd in 2016,” mov­ing closer to­ward its long-term trend, the IEA said in its monthly oil mar­ket re­port.

That will prob­a­bly mean a con­tin­ued oil sup­ply glut next year, 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 — should in­ter­na­tional sanc­tions be eased — are likely to keep the mar­ket over­sup­plied through 2016,” it said.

Cit­ing the In­ter­na­tional Mone­tary Fund’s re­cent down­ward re­vi­sions on global growth es­ti­mates by one­fifth of a per­cent­age point, “pro­jec­tions for com­modi­ties de­mand log­i­cally re­quire some trim­ming,” the re­port said.

Global con­sump­tion is ex­pected to av­er­age 95.7m bar­rels a day next year, down 100,000 from es­ti­mates in last month’s re­port.

One sur­prise 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.

But they dipped Tues­day fol­low­ing the IEA’s lat­est fore­casts, Brent North Sea crude for de­liv­ery in Novem­ber shed­ding 13 cents to stand at $49.73 per bar­rel in af­ter­noon Lon­don deals.

US bench­mark West Texas In­ter­me­di­ate for de­liv­ery in Novem­ber slid 26 cents to $46.84 per bar­rel com­pared with Mon­day’s close.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.