IEA: Demand for oil is expected to slip from its five-year high of 1.8 million barrels per day (mb/d) in 2015 to 1.2mb/d.
KUALA LUMPUR: The International Energy Agency (IEA) expects global oil demand growth to slow down in 2016 closer to long-term trend as price support is likely to wane.
In its October Oil Market Report issued on Tuesday, it said that demand was expected to slip from its five-year high of 1.8 million barrels per day (mb/d) in 2015 to 1.2mb/d.
The IEA said the demand was closer towards its long-term trend as previous price support was likely to wane. Recent downgrades to the macroeconomic outlook are also filtering through.
“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. Non-OPEC accounted for just under 40% 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,” it said.
IEA said Opec crude supply rose by 900,000 barrels per day 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 200,000 b/d from last month’s Oil Market Report to 31.1 mb/d.
IEA pointed out OECD commercial inventories extended recent gains and rose by 28.8 mb in August to stand at 2,943 mb by end-month.
Since this was nearly double the 15.0 mb five-year average build for the month, inventories’ surplus to average levels widened to 204 mb.
The onset of seasonal turnarounds in the OECD and the former Soviet Union is estimated to have curbed global refinery runs by 1.9 mb/d in September to 79.4 mb/d.
“Runs remained remarkably strong, particularly in Asia and the Middle East, leaving global throughputs up nearly 2 mb/d from a year ago,” it said.
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