Oct 14, 2015 (LBO) – Global demand growth for oil is expected to slow from its five-year high in 2015 next year closer towards its long term trend, the International Energy Agency said in its October Oil Market Report.
Lower price support and a slow down in the global economy would also lead to oversupplied conditions, the report said. This is despite a fall in U.S. shale oil production due to lower prices.
Growth in oil demand is expected to slow to 1.2 million barrels per day in 2016, down from a five-year high of 1.8 million barrels per day in 2015.
Brent crude was trading at 49.31 dollars per barrel on Wednesday, up 0.14 percent, but down from a 53 dollars per barrel high earlier this month.
“World oil supply held steady near 96.6 mb/d in September, as lower non-OPEC production was offset by a slight increase in OPEC crude,” the report said.
Non-OPEC accounted for just under 40 percent of the 1.8 mb/d annual increase in total oil output.
“Lower oil prices and steep spending curbs are expected to cut non-OPEC output by nearly 0.5 mb/d in 2016,” the report said.
“OPEC crude supply rose by 90 0000 barrels per day (90 kb/d) in September to 31.72 mb/d as record Iraqi output more than offset a dip in Saudi supply, A slowdown in forecast demand growth and slightly higher non-OPEC supply lowers the 2016 “call” on OPEC by 0.2 mb/d from last month’s Oil Market Report to 31.1 mb/d.
The IEA is an autonomous organisation which works for “reliable, affordable and clean energy” for its 29 member countries. The IEA was founded in 1974 to help countries co-ordinate a collective response to major disruptions in the supply of oil.
An IEA statement can be viewed here