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IEA Warns Global Oil Demand May Suffer As Crude Nears $80


Global demand for oil is likely to moderate this year, as the price of crude nears $80 a barrel and many key importing nations no longer offer consumers generous fuel subsidies, the International Energy Agency said on Wednesday.

The Paris-based IEA cut its forecast for global demand growth to 1.4 million barrels per day for 2018, from a previous estimate of 1.5 million bpd.

Oil has risen 51 percent in the last year, driven by coordinated supply cuts and, this month, by concern over Iranian supply after the United States said it would reimpose sanctions on Tehran over its nuclear activities.

“It would be extraordinary if such a large jump did not affect demand growth, especially as end-user subsidies have been reduced or cut in several emerging economies in recent years,” the IEA said.

Oil inventories in the world’s richest nations, the most transparent and easy to track, have now fallen 1 million barrels below the five-year average, the level targeted by the Organization of the Petroleum Exporting Countries and its partners, as the group restrains crude output for a second year.

“For now, the rapidly changing geopolitical landscape will move the attention away from stocks as producers and consumers consider how to limit volatility in the oil market,” the IEA said.

“For its part, the IEA will monitor developments closely and is ready to act if necessary to ensure that markets remain well supplied.”

Iran, which produces around 3.8 million bpd and is OPEC’s third-largest supplier behind Saudi Arabia and Iraq, could face severe disruption to its exports.

The IEA said the previous round of sanctions, which were lifted in early 2016, cut Iran’s crude exports by more than 1 million bpd.

“It is too soon to say what will happen this time, but we should examine whether other producers could step in to ensure an orderly flow of oil to the market and offset a disruption to Iranian exports,” the agency said.

Iran exported 2.6 million bpd of crude in April, according to the oil ministry’s news agency SHANA.

The IEA estimates demand for OPEC’s crude will average 32.25 million bpd for the rest of 2018, compared with output of 32.12 million bpd in April..

World supply, meanwhile, rose 1.78 million bpd in April from a year earlier, driven predominantly by non-OPEC production.

Economic crisis has driven Venezuelan production to its lowest in years, while natural decline in Mexico cut production by 175,000 bpd in April, down 8 percent year-on-year, the largest fall for any non-OPEC producer.

Record output from the United States pushed non-OPEC supplies up by 2.1 million bpd year-on-year to 59.4 million bpd. Production elsewhere outside OPEC was flat to lower, the IEA said, noting declines in the North Sea and Brazil.

The IEA, which advises Western governments on energy policy, expects non-OPEC supply to rise by 1.87 million bpd in 2018, up from a previous forecast of 1.8 million bpd.


13 Comments on "IEA Warns Global Oil Demand May Suffer As Crude Nears $80"

  1. Antius on Wed, 16th May 2018 8:16 am 

    Demand for oil declines when little people lose their jobs; cannot afford cars or any of the products made or transported with oil. That is what demand destruction looks like in real life. Rising inequality and more poor and desperate people.

  2. twocats on Wed, 16th May 2018 8:25 am 

    this can’t possibly be true. the treasure-trove of trolls that continually lurk around this board have said emphatically that we will have an oil glut into perpetuity and that there is no upper limit on oil price that could hurt demand.

    Goldilocks! Goldilocks is REAL people!!

  3. Sys1 on Wed, 16th May 2018 10:29 am 

    We are playing again the 2008 so called “crisis” which was triggered by 147$ WTI on subprimes, aka collapse of civilisation Act 2.

  4. JuanP on Wed, 16th May 2018 10:41 am 

    “The IEA, which advises Western governments on energy policy, expects non-OPEC supply to rise by 1.87 million bpd in 2018…”
    Will this supply growth be the last burp from non-OPEC countries? It feels so much like endgame. There is financial carnage ahead, but who knows how long this bubble lasts? It is, after all, the biggest, prettiest bubble in human history. It is strange to be living in such a unique moment when humanity transitions from growth to contraction. It is the most unique point in human history.

  5. JuanP on Wed, 16th May 2018 10:42 am 

    $80 sounds good.

  6. Outcast_Searcher on Wed, 16th May 2018 10:59 am 

    100,000 BPD demand is roughly one thousandth of the 100,000,000 MBPD currently produced.

    Neither the IEA nor anyone else can at all accurately predict the price of oil at all consistently. To me, such forecasts are meaningless until prices can be predicted to within a few dollars a barrel accurately.

    Let’s remember, there are all kinds of analysts and clowns predicting things about oil. Given the volatility of the oil markets and how much money is on the table in the various oil futures markets — it’s safe to say that generally, such forecasts are worth about the cost to print them. (Truly valuable ones would be traded instead of printed in mass media).

  7. Cloggie on Wed, 16th May 2018 11:34 am 

    “IEA Warns Global Oil Demand May Suffer As Crude Nears $80”

    Wonder why millimind is so

    Our anarchist-wannabee collapsenik always tries to use the IEA for his peak-oil-collapse-is-now baloney. Instead said IEA worries about collapsing demand.ROFL

    Millimind, you are by far the greatest idiot on this board.

  8. MASTERMIND on Wed, 16th May 2018 11:43 am 


    Global demand this year was much higher than what the IEA predicted originally. So if it slows down it will be right around where their original forecast was anyways. That is why I didn’t comment. Because this story is a big nothing burger.

  9. MASTERMIND on Wed, 16th May 2018 11:44 am 

    Dear reader,

    We live in frightening times. It’s my belief that “you personally” will most likely die of starvation or conflict between 2020 to 2050.

    You will experience a collapse of human civilization, a die-off of humans, a destruction of the ecosystem, a loss of access to mined and drilled resources, and a dark age from which your descendent’s will not reemerge.

    Simple really….when the World Economy Collapses everything shuts down…the end… We’re talking about grids down all over the world and 7.5B people dropping like f*** flies in short order. The collapse will be absolutely horrible..There is no collapse or horror movie ever produced that has even come close to imagining what the collapse of BAU might look like. I’m talking about every corporation and every social program going bankrupt at once. I’m talking about people eating people. I’m talking about the Worst Catastrophe to ever happen in the history of mankind. Nothing has ever, or will ever come close..

    Scholarly references:

    Scientific American: Apocalypse Soon: Has Civilization Passed the Environmental Point of No Return?

    Inside the new economic science of capitalism’s slow-burn energy collapse (Ahmed, 2017)

    Peer Reviewed Study: Society Could Collapse In A Decade, Predicts Historian (Turchin, 2010)

    NASA Peer Reviewed Study: Industrial Civilization is Headed for Irreversible Collapse (Motesharrei, 2014)

    The Royal Society: Peer Reviewed Study, Now for the First Time A Global Collapse Appears Likely (Ehrlich, 2013)

    Peer Reviewed Study: Limits to Growth was Right. Research Shows We’re Nearing Global Collapse (Turner, 2014)

    Peer Reviewed Study: Financial System Supply-Chain Cross-Contagion: Global Systemic Collapse (Korowicz, 2012)

  10. Antius on Wed, 16th May 2018 12:32 pm 

    Oil appears to be the only commodity that has persistently gained value this year. This is strongly suggestive of supply pressures.

  11. MASTERMIND on Wed, 16th May 2018 1:00 pm 

    Crude oil to hit $90 a barrel as diesel, jet fuel demand soars, Morgan Stanley predicts

  12. Pat on Wed, 16th May 2018 1:02 pm 

    absolutely ridiculous, the demand for oil to only go higher, accelerate and will not see any slump, decline until oil breaches 150$. we are in highly uncertain times, the true picture of remaining reserves, last black glue(hard to get, produce) is unknown. 100$Oil will be breached in record days and fire up to new highs..prepare the greatest show on earth……

  13. LetStupidPeopleDie on Wed, 16th May 2018 1:26 pm 

    I paid now 1.47$/liter for gazoline in Montreal area. The last I paid this price is when the price of barrel of oil was 140$.

    The price of gazoline does not stop increasing. Lot of unhappy people around me. Some people are now starting to realize that life is not joke. Some are also starting to realize they have no real skills at all. In my neighborhood t I am the only one that fixe my car and fixed my house.

    Most people are not equipped to deal with severe energy contraction and will flop out into savage beast once this start to go on.

    I still think that a total extinction of all human on earth is a real possibility.

    Canadian bank and financial system won’t hold must longer if the gazoline price stay at theses level

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