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Page added on April 13, 2017

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IEA Forecasts Second Straight Year of Slowing Oil Demand Growth

Consumption

Global oil demand growth is expected to slow for the second year in a row, the International Energy Agency said Thursday, sounding a cautious note for the market.

In its closely watched monthly oil market report, the IEA reduced its forecast for 2017 demand growth to 1.3 million barrels a day, warning that this outlook could still “prove optimistic.”

Though the anticipated increase in demand is still higher than the trend seen before oil prices crashed in 2014, it is still well below the 2015 level when demand growth peaked at 2 million barrels a day.

The weakening demand picture is a challenge for the Organization of the Petroleum Exporting Countries’ efforts to reduce supply and boost prices by bringing an end to the glut that has weighed on the oil market for the last three years.

OPEC’s oil production fell by 365,000 barrels a day in March, bringing the group’s adherence to its supply commitments to 99%, according to the IEA. Non-OPEC producers who agreed to participate in the market action also improved their compliance to 68% in March from a meager 38% the month before, the IEA said.

The improved compliance will likely smooth talks as members of the agreement begin to raise the prospect of extending the cuts, despite concerns that other producers will likely benefit from the group’s action.

Production in the U.S. is already on the rise, increasing to 9 million barrels a day in March from a trough of 8.6 million barrels a day last September, the IEA said. The Paris-based energy watchdog sees U.S. output up by 680,000 barrels a day by the end of the year compared with the end of 2016. Overall, non-OPEC output is expected to rise by 485,000 barrels a day this year.

Write to Sarah Kent at sarah.kent@wsj.com

wsj.com



6 Comments on "IEA Forecasts Second Straight Year of Slowing Oil Demand Growth"

  1. James Tipper on Thu, 13th Apr 2017 9:12 pm 

    “The weakening demand picture is a challenge for the Organization of the Petroleum Exporting Countries’ efforts to reduce supply and boost prices by bringing an end to the glut that has weighed on the oil market for the last three years.”

    Say glut one more time.

  2. dave thompson on Fri, 14th Apr 2017 3:02 am 

    Should read ” Slowing net energy growth”

  3. twocats on Fri, 14th Apr 2017 7:47 am 

    so long as “demand” is increasing, even if it’s mostly a tribute to the Red Queen, its hard to call BS on the decline of the global economy. until liquids supply decreases, even if its 1/100th of the energy quality of conventional crude, its hard to call BS on that side of the equation either.

    In addition, now that GDP has at least partially “decoupled” from energy (many people, including Dennis Coyne believe this) they can ride that part of the myth even as demand and supply begin to decline.

    Only after pumps begin to run dry and whatever other reason they come up with fails (blame it on some war, etc) will the reality of POD become less avoidable.

    after 12 years of parlor tricks there’s no reason to think this won’t continue.

  4. dave thompson on Fri, 14th Apr 2017 10:54 am 

    POD is another way of saying depletion, with a bit of spin, to keep the masses from facing the reality of trying to have infinite growth on a finite planet.

  5. BobInget on Fri, 14th Apr 2017 2:45 pm 

    Slower growth, not reverse growth.

    Sure, there are more hybrids of almost every auto maker being sold. For each false flag ecco car sold
    count another two overstuffed mussel-car or monster truck goes out the door.

    Can’t wait till summer driving season begins in earnest. I’m betting (actual money) total US crude consumption tops 21 MM Bp/d .

    Three days ago…

    https://www.eia.gov/outlooks/steo/report/us_oil.cfm

    Invariably EIA underestimates consumption.

  6. BobInget on Fri, 14th Apr 2017 2:51 pm 

    Tesla won’t come out with a E.pick-up till 2018.
    However, the new semi trailer tractor will show up by the end of 2017. Just guessing. It will be powered by
    hybrid natural gas powered diesel.

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