Oil demand growth may slow to 1.2 mbd in 2016, says IEA

Global demand for oil is projected to grow by only 1.2 million barrels per day (mbd) next year after hitting an expected five-year high of 1.8 mbd in 2015, the Paris-based International Energy Agency (IEA) said in its latest Oil Market Report.

“Momentum will ease towards its long-term trend as recent props – sharply lower oil prices, colder-than-year-earlier winter weather and post-recessionary bounces in some countries – are likely to give way,” the IEA said.

Global oil supply crossed the 97 mbd mark in October, as non-OPEC stocks recovered from a lower level in September. OPEC crude supply held steady during the month at 31.76 mbd, with declines in Iraq and Kuwait offset by higher supply levels in Libya, Saudi Arabia and Nigeria.

Non-OPEC supply however, is forecasted to contract in line with US light tight oil (LTO) with a decline of 600,000 barrels per day (bpd) in 2016.

OECD commercial inventories rose counter-seasonally by 13.8 million barrels (mb) to reach nearly three billion barrels by the end of September. Global refinery runs fell 1.2 mbd in October to 78.2 mbd as seasonal maintenance led to a significant reduction in annual growth.

The IEA report comes after OPEC said that it sees global oil demand growing by 1.25 mbd in 2016 after achieving growth of 1.5 mbd this year.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com