IEA’s Birol: IEA revising down 2019 global oil demand growth forecast

In a Reuters in interview late-Thursday, the International Energy Agency (IEA) Executive Director Faith Birol said the Agency is making a downward revision to its 2019 global oil demand growth outlook to 1.1 million barrels per day (bpd) and leaves scope for further downgrade should the global and Chinese economy slowdown further.

Key Highlights:

“China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come.

The IEA was concerned by rising Middle East tensions, particularly around the Strait of Hormuz, a vital shipping route linking Gulf oil producers to markets in Asia, Europe, North America and elsewhere.

We are keeping a close eye on what is happening there. And if something happens, we are ready to act quickly and decisively. 

In the very short-term, the effect of those options are not very huge. We should think of options and work on them. They will not bring a major change in the current markets but will be helpful in the medium and longer-term.

Oil prices at around $65 a barrel priced in tensions relating to Iran, Libya and Venezuela, as well as concerns about the U.S.-Chinese trade row.”

Both crude benchmarks are little affected by the IEA’s revision, as rising US-Iran geopolitical tensions amid reports that the US Navy downed Iranian drones continue to keep the sentiment around the black gold lifted.