11 August 2012, Sweetcrude, VIENNA – THE International Energy Agency, IEA, has said that world oil demand will reach 90.5 million barrels per day next year, up from its predicted 89.6 million barrels per day for this year.
The agency said a slowdown in economic activity will put the brakes on global oil demand growth in 2013.
According to the IEA, annual demand growth will be restricted to 900,000 barrels per day this year, giving an average of 89.6 million bpd, with the rate sinking to 800,000 bpd in 2013, when it predicted 90.5 million bpd demand.
It said oil prices, which have rebound to above $110 per barrel after earlier falling below $90, are likely to be given support in the next few months by geopolitical tensions as well as sanctions on Iran crude exports over its nuclear programme.
“The geopolitical dimension is likely to continue to provide something of a floor for prices. The issue of Iran will likely continue to weigh heavy on the market through the second half of 2012,” the IEA stated in its report.
“Moreover, there is a risk that recent progress in restoring output from Libya, Iraq and Nigeria could be jeopardised if recent political and civil tensions worsen.”
The IEA attributes the lower demand growth forecast to “sluggish economic growth”with an expected slowdown in major economies China and the US contributing to the “weaker backdrop” for the crude market.
Its prediction echoes similarly pessimistic forecasts issued this week by Opec and the US government.
Meanwhile, global oil supply increased 300,000 bpd to 90.7 million bpd in July compared with the previous month, the IEA said.
