ZCZC
BCN-08
ENERGY-OIL-IEA
Global economic uncertainty threatens oil demand: IEA
PARIS, Aug 10, 2019 (BSS/AFP) – Concerns over the health of the global
economy, marked by the US-China trade dispute, forced the International
Energy Agency on Friday to lower its growth forecast for oil demand for 2019
and 2020.
“There have been concerns about the health of the global economy expressed
in recent editions of this report and shown by reduced expectations for oil
demand growth,” the Paris-based agency said in its monthly report.
“Now, the situation is becoming even more uncertain: the US-China trade
dispute remains unresolved and in September new tariffs are due to be
imposed.”
“Tension between the two has increased further this week, reflected in
heavy falls for stock and commodity markets. Oil prices have been caught up
in the retreat.”
It also noted the International Monetary Fund’s recent downgrading of its
economic outlook.
The IEA thus revised downwards its estimates for growth in global oil
demand for this year by 0.1 million barrels per day to 1.1 mbd.
For 2020, growth was also predicted to be slightly down, by 50,000 barrels
per day to 1.3 mbd.
It warned “the outlook is fragile with a greater likelihood of a downward
revision than an upward one”, and noted growth was already “sluggish” in the
first half of the year.
However, it noted that the market balance has been tightened slightly in
the short-term by a reduction in supply from OPEC countries.
The IEA also said it was closely monitoring oil security in the Gulf,
where OPEC member Iran last week seized the third foreign tanker in less than
a month as part of a bitter dispute with the United States.
It said that geopolitical tensions in the Gulf “remain high, with US
sanctions recently extended to more Iranian officials and a Chinese oil
importer, as well as another tanker seizure”.
But the agency noted that Brent oil prices have eased back from the most
recent high of $67/bbl, and shipping operations are at normal levels, albeit
with higher insurance costs.
“The messages from various parties that vessels will be protected to the
greatest extent possible, and the IEA’s recent statement that it is closely
monitoring the oil security position in the Strait of Hormuz will have
provided some reassurance.”
BSS/AFP/HR/0950