Following strong demand growth in 1Q18. in 2Q18 and 3Q18 the pace has slowed dramatically to a relatively subdued 1 mb d. the International Energy Agency said in its August Oil Market Report.
“In 4Q18 we expect a rebound and demand will be 100.2 mb d. For 2018. our global demand growth outlook is unchanged at 1.4 mb d. In 2019 growth accelerates slightly to 1.5 mb d. but there are risks to the forecast from escalating trade disputes and rising prices if supply is constrained.“ said the report.
Further. IEA experts noted that with so much focus on geopolitics in recent months. underlying demand trends have perhaps received less attention but there are interesting developments.
“As far as growth is concerned. the global number for 2018 looks solid for now at 1.4 mb d. However. this is heavily influenced by demand in 1Q18 when growth was more than 1.8 mb d. mainly due to low temperatures in the northern hemisphere. As we move through 2Q18 and 3Q18. growth is estimated at only 1 mb d. partly due to comparisons with high year-ago demand levels and because prices (based on Brent crude) have typically been about 45 percent higher.“ said the report.
IEA said that in OECD Europe. oil demand fell below last year`s level in 2Q18. and in the US falling gasoline demand has contributed to more than the halving of total demand growth in 2Q18 versus 1Q18.
The two leading non-OECD oil markets. China and India. both remain on course to grow solidly this year. although data issues with respect to China cloud the picture to some extent. according to the report.