(EnergyAsia, September 1 2014, Monday) — The International Energy Agency (IEA) has scaled back its forecast for next year’s global oil demand to 94 million b/d while keeping it little changed at 92.68 million b/d for 2014.

The agency detected a slowdown in oil demand growth in the second quarter on account of a weaker global economy that will likely persist for the rest of the year. It cited the International Monetary Fund (IMF) downgrading its 2014 global GDP growth forecast by three‐tenths of a percentage point to 3.4% from its previous outlook.

In July, the IEA had expected global oil demand to rise by 1.52% in 2015 and by 1.35% in 2014. The latest forecast for August pared those growth rates down to 1.42% and 1.15% respectively.

The forecasts were made before the worsening of the geopolitical crises in the Iraq, Syria, Libya and Ukraine, and the further deterioration of West Africa’s fragile economies with the spread of the incurable deadly Ebola disease. A further downgrade in the global oil demand outlook could be in the cards for September and beyond.

In its August report, the IEA said it expects global oil demand growth to accelerate in 2015 on improving macroeconomic conditions, although it did downgrade forecasts for China, Russia and Japan.

Due to its growing confrontation with the West, Russia’s outlook has been dampened, with the IMF slashing its forecast for the economy to grow by only one percent in 2015, compared with an April estimate of 2.3%. Japanese oil demand will be held back by expectations for increased use of coal, natural gas and nuclear energy.

On the supply side, the IEA said OPEC’s crude oil production rose by 300,000 b/d to a five-month high of 30.44 million b/d in July. The cartel’s supply was boosted by Saudi Arabia raising production to 10 million b/d and Libya’s tentative recovery to more than offset losses in Iraq, Iran and Nigeria.

Oil prices sank to a 13-month low in August, thanks largely to rising supplies from North America which helped shield the market from supply disruptions in the Middle East and Africa. Brent fell below US$102 while WTI sold for less than US$93.

August 2014
2013        2014        2015        2015/2014
Americas        24.02        24.07        24.10        0.12%
Developing Asia    21.90        22.53        23.31        3.46
MidEast          7.90          8.12          8.37        3.08
Latin America          6.62          6.79          6.93        2.06
Former SU          4.73          4.78          4.84        1.26
Africa              3.84          3.97          4.16        4.79
Others            22.62        22.42        22.29        -0.58
TOTAL            91.63        92.68        94.00        1.42%

July 2014
2013        2014        2015        2015/2014
Americas        24.01        24.12        24.14        0.08%
Developing Asia    21.82        22.50        23.31        3.60
MidEast          7.97          8.19          8.45        3.17
Latin America          6.61          6.78          6.93        2.21
Former SU          4.61          4.69          4.77        1.71
Africa              3.71          3.88          4.06        4.64
Others            22.71        22.51        22.42        -0.40
TOTAL            91.44        92.67        94.08        1.52%