IEA sees continued slowing in global oil demand in 2016

The Paris-based International Energy Agency (IEA) on Tuesday said wan growth in OECD countries and decelerating economic pace in China would weigh heavy on the global oil demand which is set at 1.2 million barrels per day (bpd) this year.

"Growth (of oil demand) continues to slow, dropping from a five-year high in Q3 2015 to a four-year low in Q3 2016 due to vanishing OECD (Organisation for Economic Co-operation and Development) growth and a marked deceleration in China," the agency said.

However, expected colder weather should contribute to a rebound somewhat in the last three months of 2016, it added.

IEA estimated demand to expand by 1.2 million bpd this year, the same rate set for next year.

In a report released in August, the IEA lowered its forecast of 2016 growth by 40,000 bpd to stand at 1.2 million bpd.

Last month, higher Russian and Kazakh flows brought non-OPEC (Organization of the Petroleum Exporting Countries) oil supply up to nearly 0.5 million bpd. For the whole year of 2016, the IEA forecast non-OPEC states would provide 0.9 million bpd less oil before rebounding in 2017.

Global refinery crude throughputs for the fourth quarter this year is estimated to decline seasonally by 1.1 million bpd "weighed down by autumn maintenance."

For the whole year of 2016, global throughputs is expected to grow by just 220,000 bpd, "the lowest annual growth rate in more than a decade, excluding the last economic recession."

Benchmark oil for September rose "as market re-balancing continued and participants anticipated an OPEC supply cut," IEA said in its report. Endit