IEA trims oil demand forecast for the first time this year on 'persistent' economic headwinds

Two massive oil tankers unload on the 300,000-ton crude oil terminal in Yantai Port, Shandong Province, China, July 9, 2023.

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The Worldwide Power Company on Thursday reduce its international oil demand development forecast for the primary time this yr, primarily citing a worsening financial outlook that weighs “particularly heavy” on rich nations.

The world’s main power watchdog stated international oil demand is now on monitor to climb by 2.2 million barrels per day in 2023 to succeed in a mean of 102.1 million barrels per day.

China is ready to account for 70% of the demand development improve, the IEA stated.

This forecast however represents a downward revision of 220,000 barrels per day from final month’s report, when the IEA predicted a rise of two.4 million barrels per day of worldwide development.

“Persistent macroeconomic headwinds, obvious in a deepening manufacturing droop, have led us to revise our 2023 development estimate decrease for the primary time this yr,” the IEA stated in its newest month-to-month oil market report launched on Thursday.

“World oil demand is coming below strain from the difficult financial atmosphere, not least due to the dramatic tightening of financial coverage in lots of superior and creating nations over the previous twelve months,” the company added.

Waiting for subsequent yr, the IEA expects demand development to gradual to 1.1 million barrels per day, “because the restoration loses momentum and as ever-greater automobile fleet electrification and effectivity measures take maintain.”

The IEA final month stated that international demand will trickle practically to a halt within the coming years and peak earlier than the tip of the last decade because the transition away from fossil fuels gathers tempo.

The Thursday report comes at a time when latest U.S. inflation and financial information renewed hopes that the Federal Reserve could also be closing in on an finish to its charge climbing cycle.

Oil costs traded barely greater on Thursday morning, extending positive aspects month-to-date.

Brent crude futures with September expiry had been up round 0.4% at $80.42 a barrel at round 9 a.m. London time, whereas U.S. West Texas Intermediate crude futures with August supply rose 0.3% to commerce at $75.98 a barrel.

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