“Global demand growth is expected to slow from its five-year high of 1.8 million barrels per day in 2015, to 1.2 mb/d in 2016,” the IEA said in its monthly oil market report.
That will probably keep oil markets oversupplied next year, especially with the expected arrival of Iranian crude.
“A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels -– should international sanctions be eased -– are likely to keep the market oversupplied through 2016,” it said.
Citing the International Monetary Fund’s recent downward revisions on global growth estimates by one-fifth of a percentage point, “projections for commodities demand logically require some trimming,” the report said
One surprise is the resilient oil demand in China despite its economic slowdown.
“Our preliminary August estimate posted a near double-digit percentage point gain in year-on-year terms despite the otherwise ailing macroeconomic backdrop,” the IEA said.