The international energy watchdog, which listed these to include high oil prices, mild weather and a likelihood of a global recession, noted in its latest monthly report that “oil demand is falling for the first time since the global economic crisis of 2008-2009”.
The IEA also noted that although worries about disruptions to Iranian oil exports have supported prices, consumption fell in the last quarter of 2011 year-on-year due to mild winter weather in the northern hemisphere and the overriding fears about an impending recession in the euro zone.
The IEA cut its global oil demand estimates as the threat of the euro zone debt crisis and restricted private sector credit remained. The agency also reduced its 2012 demand growth forecast by 220,000 barrels per day from its previous monthly report to 1.1 million barrels.
Further downgrades to global GDP estimates will trigger cuts in estimates of global oil consumption, it said, adding that a one-third cut to GDP growth would see this year’s oil consumption unchanged at 2011 levels.
“This alternative scenario is based upon the very real possibility that Europe’s current financial and economic woes – with many nations already bogged down in the early stages of recession – remain unsolved, spilling over into significantly lower growth elsewhere,” it said.
Tensions with Iran over its nuclear programme, together with worries about Nigerian and Iraqi supplies, have helped keep prices above $100 a barrel.