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 Tuesday.
“Global demand growth is expected to slow from its five-year high of 1.8 million barrels per day in 2015, to 1.2 mb/d 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 one-fifth of a percentage point, “projections for
commodities demand logically require some trimming,” the report said
Global consumption is expected to average 95.7 million 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.
