IEA cuts forecast for 2014 world oil demand growth
Reuters reported that world oil demand will rise less than previously thought in 2014, due to a lower outlook for Russia’s economic growth following its annexation of Crimea.
The International Energy Agency, which advises industrial countries on oil policy, also reduced its forecast for non-Opec supply this year, which will increase the need for crude from the Organisation of the Petroleum Exporting Countries.
The IEA said in its monthly Oil Market Report that global demand growth will average 1.29 million barrels per day in 2014. That is 60,000 barrels per day lower than its previous forecast.
The report said that “Downward adjustments to the forecast of Russian oil demand for 2014 helped trim the global demand growth estimate. Developments in Crimea have weakened Russia’s macroeconomic outlook.”
The Paris based IEA is the only one of the 3 main government oil forecasters to trim its 2014 demand growth projection in reports this week.
Its view follows lowered Russian economic growth outlooks from the International Monetary Fund and World Bank.
Brent crude edged down after the report’s release and as of 0845 GMT was off 31¢ at USD 107.15 a barrel.
The IEA lowered its view on 2014 supply from non-Opec countries, which pump about three in every 5 barrels. The agency now expects supply outside Opec to rise by 1.5 million barrels per day this year, 250,000 barrels per day less than it projected last month.
Accelerated rates of decline at older Russian oilfields accounted for part of the reduced supply forecast as did a lower estimate for Kazakhstan, where the giant Kashagan oilfield may fail to restart this year.
The report said that “While non-Opec supply growth is still forecast to be the highest in decades, expectations are being toned down somewhat.”
Supply from Opec declined by 890,000 barrels per day in March to 29.62 million barrels per day, according to the IEA, which said the group would have to pump more in the second half of the year.
Source - Reuters