IEA lowers its growth forecast in oil demand for 2018, 2019

Irving Hamilton
October 13, 2018

Output, which includes crude oil, natural gas liquids, biofuels and refinery processing gains, was 2.3 million barrels above the same period previous year and 1.3 million barrels a day higher than the second quarter.

Oil prices are hovering near multi-year highs, and even with supplies increasing there will be a strain on the markets that will result in higher prices, potentially a bad sign for the global economy. "For many developing countries, higher global prices coincide with currencies depreciating against the U.S. dollar, so the threat of economic damage is more acute", the IEA said.

OPEC, Russia and others such as U.S. shale companies had increased production sharply since May, the IEA said, raising global output by 1.4 million barrels per day (bpd).

The International Energy Agency on Friday revised lower its growth forecast in global oil demand for 2018 and 2019, citing high prices, trade tensions and a less favorable economic outlook.

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Meanwhile, according to the report, global oil supply is growing fast, with figures showing world oil production at around 100 million bpd, 2.6 million bpd higher than a year ago.

Overall, OPEC had boosted production by 735,000 bpd since May as Middle East Gulf producers such as Saudi Arabia and the UAE more than compensated for declining output in Venezuela and Iran, which is facing U.S. sanctions from next month. Iranian oil exports in September fell to 1.63 million bpd, down 800,000 bpd from recent 2Q18 peaks, the agency estimated.

Since May, Opec output increased by 735,000 bpd, led by the main Gulf producers and supported by Nigeria and Libya, offsetting falls in Iran and Venezuela, the IEA said.

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