MOSCOW (Sputnik) — The International Energy Agency (IEA) has revised its forecast for global oil demand growth in 2016 further to 1.2 million barrels per day while keeping its 2017 expectations at the same level of 1.2 million, the IAE monthly Oil Market Report, released on Tuesday, showed.
"Demand is forecast to expand by 1.2 mb/d this year, with a similar gain expected in 2017. Growth continues to slow, dropping from a five-year high in 3Q15 to a four-year low in 3Q16 due to vanishing OECD growth and a marked deceleration in China. The potential for colder weather should see growth rebound somewhat in 4Q16," the report reads.
In its September report, the agency forecast demand to expand by 1.3 million barrels per day in 2016 after trimming August's forecast by 0.1 million.
The report noted the United States for showing substantially lower than expected demand growth, while China's demand for oil remained unchanged do to an industrial slowdown in the country.
The oil market is watching demand fluctuations closely as the ongoing glut in global oil supply continues to depress prices, which plunged from $115 to less than $30 per barrel between June 2014 and January 2016, hitting their lowest levels since 2003. Prices have since recovered to around $45-50 per barrel for the Brent crude benchmark.
