(EnergyAsia, January 9 2015, Friday) — Based on current projections of weak demand growth and robust supply, the IEA said it expects global oil inventories to rise by nearly 300 million barrels in the first half of 2015 in the absence of disruption, shut-ins or cut in OPEC production.

If half of this took place in the Organisation for Economic Cooperation and Development (OECD) countries, the IEA projects oil stockpiles to reach a total of 2.87 billion barrels and possibly reach storage capacity limits.

Despite the abundant offer of cheaper oil, the Paris-based agency has reduced its latest forecast outlook for global oil demand growth for 2015 by 230,000 b/d to around 900,000 b/d. The world will now consume 93.3 million b/d in 2015, up from 92.4 million b/d last year.

In its November report, the agency had forecast global oil consumption at more than 93.5 million b/d.

It said most of the projected reduction in demand growth will take place in the former Soviet Union states and other oil-exporting countries which will experience lower economic growth. In several developing countries, the impact of a strong dollar and the lifting of subsidies on demand have been offset somewhat by lower prices, said the IEA.

“Increases in consumption taxes and reductions in energy subsidies, as have recently occurred in China, Indonesia, Kuwait, India, Thailand, Egypt and Malaysia, look set to blunt the impact of lower oil prices on demand,” it noted.

On the supply side, the agency, which represents the interest of 29 oil consumer countries, said surging production of light tight oil in the US will likely have raised total non-OPEC production in 2014 to a record level of 1.9 million b/d, but the pace is expected to slow to 1.3 million b/d in 2015.