IEA Cuts Global Oil Demand Outlook for Sixth Consecutive Month
Amid continued signs of a weak global economy throughout 2012, the International Energy Agency Friday lowered its global demand forecast for the sixth consecutive month.
The IEA now sees demand around 800,000 barrels per day, down from a prior estimate of 1.05 million barrels per day. The move follows a cut by the Organization of the Petroleum Exporting Countries on Thursday to lower its global estimate by 120,000 barrels to 940,000. In contrast, the U.S. Energy Information Administration lifted its global demand growth estimate on Tuesday by another 50,000 barrels per day to 1.32 million.
The mild winter conditions in North American have helped lead to drastic declines in demand, while poor economic conditions in Europe has families lowering the temperature on their thermostats. "Much of Europe already saw declines in economic activity in 4Q11, and with further drops assumed for the 1Q12, this equates to the technical definition of recession," the IEA said.
The IEA forecasts oil demand in 2012 will decline by 0.8 percent in most industrial nations; reductions in gasoline demand may make up roughly 40 percent of that decline.
International sanctions put on Iran should not hamper demand, according to the IEA. The agency highlighted rising production levels in North and Latin America, along with a reduction in demand which will likely offset supply.
The global oil supply rose by 100,000 barrels per day to 90.2 million in January as OPEC’s supply rose over its average 30 million barrels per day by an additional 900,000 barrels.
The price of crude has been on a roller coaster as talks of demand and growth fluctuate. Crude is trading down roughly 2 percent to $97.80 a barrel at last check.
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The IEA now sees demand around 800,000 barrels per day, down from a prior estimate of 1.05 million barrels per day. The move follows a cut by the Organization of the Petroleum Exporting Countries on Thursday to lower its global estimate by 120,000 barrels to 940,000. In contrast, the U.S. Energy Information Administration lifted its global demand growth estimate on Tuesday by another 50,000 barrels per day to 1.32 million.
The mild winter conditions in North American have helped lead to drastic declines in demand, while poor economic conditions in Europe has families lowering the temperature on their thermostats. "Much of Europe already saw declines in economic activity in 4Q11, and with further drops assumed for the 1Q12, this equates to the technical definition of recession," the IEA said.
The IEA forecasts oil demand in 2012 will decline by 0.8 percent in most industrial nations; reductions in gasoline demand may make up roughly 40 percent of that decline.
International sanctions put on Iran should not hamper demand, according to the IEA. The agency highlighted rising production levels in North and Latin America, along with a reduction in demand which will likely offset supply.
The global oil supply rose by 100,000 barrels per day to 90.2 million in January as OPEC’s supply rose over its average 30 million barrels per day by an additional 900,000 barrels.
The price of crude has been on a roller coaster as talks of demand and growth fluctuate. Crude is trading down roughly 2 percent to $97.80 a barrel at last check.
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