The International Energy Agency (IEA) has raised its estimate of world oil demand growth next year to 1.5 million barrels per day from 1.4 million, anticipating that the impact of price rises will gradually fade out, whilst highlighting robust non-OPEC oil output growth.
In its monthly oil market report, the IEA also raised the need of Organisation of Petroleum Exporting Countries (OPEC) crude oil by 300,000 barrels per day in 2018 to 32.3 million barrels per day, and by 500,000 barrels per day in 2019 to 31.9 million barrels per day.
Despite a strong first quarter this year, it said world crude oil demand had grown by a mere 750,000 barrels per day on the year in the second quarter, constrained by sharp price rises. The IEA said, “there are risks to the forecast from escalating trade disputes and rising prices if supply is constrained.”
On the supply side, the IEA also raised its estimate for growth in non-OPEC oil output next year to 1.9 million barrels per day, from 1.8 million barrels per day in its previous report.
The international energy body then commended the global upstream oil industry for having managed to raise output while reducing its costs and improving its financial position, estimating the major oil companies had increased their oil and gas output by 11 percent since 2014, while cutting their spending by 49 percent.
“Overall, the upstream industry is looking decidedly healthier on higher oil prices, sustained cost reductions and improved finances,” it said.