Global oil demand will be squeezed by weak economic growth this year, while soaring U.S. production gives consumers a perfect cushion to withstand most supply outages, the West’s energy agency said yesterday.
The International Energy Agency (IEA), which advises major consuming nations on energy policy, said worsening Chinese business sentiment, a European slowdown and the prospect of U.S. budget cuts would limit demand for oil worldwide.
“Together these three economic ‘hits’, affecting as they do the three largest economies and oil consumers, appear to further delay an elusive turnaround in global economic and in turn oil demand, growth,” the IEA said in its monthly oil market report.
The IEA said it was bearish on oil demand for 2013, trimming its forecast for oil demand growth by 20,000 barrels per day (bpd) to 820,000 bpd.
“The subdued growth rate of oil demand now looks increasingly entrenched in the face of high oil prices and weak economic growth,” it said.