The International Energy Agency (IEA) report on oil demand was another signal of a global economic slowdown that is now likely to last through 2013. In its August Oil Market Report (OMR), the agency said it cut:
2012/2013 oil demand expectations by 300-400 thousand barrels per day (kb/d), although annual growth remains in an 800-900 kb/d range both years. This follows baseline data revisions and a weaker economic prognosis for 2012/2013.
The goal of the monthly document is to supply information on the international oil market and projections for oil supply and demand 12 to 18 months ahead. The IEA mentioned that oil prices have remained relatively high because of modest stockpiles and concerns about trouble in Iran. If and when those issues begin to disappear, prices should begin to soften. Although the IEA does not make a forecast, this series of events should combine to bring down oil prices, as well as those of byproducts like gasoline and petrochemicals. And that should in turn be some relief as the world economy dips for the second time in five years.
Douglas A. McIntyre