IEA Sees Oil Demand Growth Slowing Further In 2013

  on

(Reuters) - Global oil demand growth will fall next year below already very weak levels of 2012 due to a slow-down in economic activity, the west's energy watchdog said on Friday.

The outlook by the International Energy Agency (IEA) echoes similarly pessimistic forecasts revealed this week by the U.S. government and the Organization of the Petroleum Exporting Countries (OPEC).

The IEA also said oil prices may remain elevated in the next few months as geopolitical tensions, including a stand-off between the West and Iran over Tehran's nuclear programme, offset the bearish impact of the weaker global economy.

"The geopolitical dimension is likely to continue to provide something of a floor for prices. The issue of Iran will likely continue to weigh heavy on the market through the second half of 2012," the IEA said in its monthly report.

"Moreover, there is a risk that recent progress in restoring output from Libya, Iraq and Nigeria could be jeopardised if recent political and civil tensions worsen."

brent oil prices have plunged below $90 a barrel in June after Saudi Arabia stepped in to raise production to multi-year highs at a time when Iranian exports plunged because of Western sanctions.

Brent prices have recovered to above $110 a barrel in August, and above $90 a barrel for West Texas Intermediate crude, supported by Iranian tensions and investors' hopes for new money printing programms from global central banks to support the flagging economy.

--

Join the Discussion