Oil Pump Jack Canada
An oil pump jack pumps oil in a field near Calgary, Alberta. The IEA this week trimmed its global oil demand growth forecast for the third month in a row. Reuters/Todd Korol

The world’s demand for crude oil will grow at a remarkably slower pace this year and next, the International Energy Agency projects. The Paris-based watchdog says it trimmed its growth forecasts again as European and Chinese economies continue to weaken.

“The recent slowdown in demand growth is nothing short of remarkable,” the IEA said in its September oil market report on Thursday. The agency also cut its forecasts in its August and July reports.

For all of 2014, the agency now expects oil demand to grow by 900,000 barrels per day (bpd), down by 150,000 bpd from earlier projections. For 2015, it reduced its estimates by 100,000 bpd to 1.2 million bpd.

“Euro zone economies, already struggling with stagnation, are getting perilously close to deflation,” according to the IEA, Reuters reported. That could cause “further reductions in economic activity, as market participants delay investment/purchasing decisions.” China is unlikely to see demand grow by much more than 2 percent, the agency said.

IEA analysts said the lower demand growth will help offset some of the drop in production in Iraq and Libya, which have struggled to maintain production, refining and export levels as armed insurgents jeopardize infrastructure and supply routes.

While conflicts in those countries “show no sign of abating, their effect on global oil market balances and prices remains muted amid weakening oil demand growth and plentiful supply” from non-OPEC nations, including the United States, the IEA said.