Faltering economic growth will undercut global oil demand this year and next, the International Energy Agency (IEA) said yesterday, citing slowdowns in China and the US in particular.
“Sluggish economic growth could restrict annual oil demand growth to 0.9 million barrels per day [mbpd] 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 agency highlighted slower demand in the US and China, which together account for a third of the global market, while technical changes in its calculations also cut its forecast for this year by 0.25 mbpd.
The IEA, set up to advise developed countries on energy policy, reduced its economic growth forecast for next year to 3.6 percent from 3.8 percent, but left its estimate for this year unchanged at 3.3 percent.
The Chinese economy, which has driven demand for oil and other commodities for the past 20 years, was likely to grow 8 percent this year, instead of 8.2 percent, rising marginally to 8.1 percent next year, rather than 8.5 percent.
Chinese official data this week bears out that picture, with the government expected to announce fresh stimulus measures to keep economic growth at around 8 percent, the minimum necessary to provide enough new jobs to keep unemployment at bay.
The IEA put US growth next year at 2 percent, down from the 2.3 estimate it gave in last month’s report.