In another blow to the price of oil, the International Energy Agency (IEA) cut its forecast for crude demand in 2015. Oil dove below $59.

The agency’s experts wrote:

The IEA Oil Market Report (OMR) for December cut the outlook for 2015 global oil demand growth by 230 000 barrels per day (230 kb/d) to 0.9 million barrels per day (mb/d) on lower expectations for the Former Soviet Union and other oil‐exporting countries.

The monthly report told subscribers that a strong dollar and the lifting of subsidies have so far limited supportive price effects on demand, which is now seen reaching 93.3 mb/d next year, from 92.4 mb/d in 2014.

Global production fell by 340 kb/d in November to 94.1 mb/d on lower OPEC supplies. Annual gains of 2.1 mb/d were split evenly between OPEC and non‐OPEC producers. Surging US light tight oil supply looks set to push total non‐OPEC output to record growth of 1.9 mb/d for 2014, but the pace is expected to slow to 1.3 mb/d for next year.

OPEC crude supply declined by 315 kb/d in November to 30.32 mb/d after Libya’s recovery stumbled, but it stood 765 kb/d than in November 2013. The “call on OPEC crude and stock change” for 2015 was revised down by 300 kb/d to 28.9 mb/d. The “call” is expected to decline seasonally by 1.2 mb/d from this quarter to the first quarter of 2015.

Global refinery crude throughputs bounced back in November from a seasonal low of 76.8 mb/d in October. The estimate of throughputs this quarter has been revised sharply higher since the previous OMR, to 78 mb/d, as refiners apparently took advantage of healthy margins ahead of a flurry of refinery start‐ups expected early next year.

The chances that demand will continue to drop in the European Union and perhaps Japan due to rapidly slowing economies continues to increase. Even China’s slowdown could curtail its demand for crude. While the U.S. economy is strong, the amount of oil available in the country remains high.

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