Oil Demand Growth Grinding To Lowest In Years As Global Economy Stalls

www.oann.com | 6/11/2019 | Staff
marika (Posted by) Level 3
SINGAPORE/HOUSTON (Reuters) – World oil markets have undergone a U-turn, switching from supply-side risks like OPEC’s production cuts or U.S. sanctions against producers Iran and Venezuela, analysts said, to concerns of slowing consumption amid fears of a global recession.

U.S. investment bank Goldman Sachs said on Wednesday that weakening economic growth and lower oil demand expectations were “the largest driver of the move lower over the past month” in crude oil prices.

Outlook - Dim - Trade - Disputes - One

And with the outlook dim amid trade disputes – especially the one that has led to an expanding exchange of tariffs between China and the United States – analysts have revised down their oil demand growth forecasts.

Fereidun Fesharaki, chairman of energy consultancy FGE, said the demand slowdown came amid a “general fear of an economic downturn,” and warning that if the U.S.-China trade dispute continues, “real signs of economic recession will be seen.”

Jitters - FGE - Week - Oil - Demand

Due to the economic jitters, FGE this week revised down its global oil demand growth forecast to 1 million barrels per day (bpd) from 1.3 million bpd, in line with other recent downward corrections.

Barclays bank said this week it had revised down its economic growth outlooks for the United States, China, India and Brazil, countries that account for more than three-quarters of global oil demand growth.

Bank - Oil - Demand - Growth - Bpd

The British bank also cut its oil demand growth forecast by 300,000 bpd to 1 million bpd.

“There is potential for further downside to demand, which means this will likely be the worst year for oil demand growth since 2011,” it said.

Bank - America - Merrill - Lynch - Oil

Bank of America Merrill Lynch said “global oil demand growth is running at the weakest rate since 2012,” although it still estimates growth to be around 1.2 million bpd for 2019.

Analysts participating in a May Reuters oil survey had their most optimistic growth forecasts at around 1.4 million bpd, as...
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