The International Energy Agency (IEA) cut its forecast for global oil demand in the fourth quarter, citing weakness in Europe and the impact of Hurricane Sandy in the U.S., but saw strong demand in emerging countries where oil demand is set to grow at its fastest pace in almost two years.
The IEA cut estimates for global oil demand in the fourth quarter by 300,000 barrels per day (b/d) in its monthly Oil Market Report released on Tuesday.
In all, the IEA has cut oil demand forecasts for the fourth quarter by 850,000 b/d since its June forecast.
"A weak economic backdrop – with the global economy forecast to rise by 3.3 percent in 2012 and 3.6 percent in 2013 – continues to restrain oil demand growth throughout the forecast," it added.
But the weak demand in developed countries sharply contrasted with a jump in demand in non-OECD countries, most notably China, the agency said.
It revised its estimates of Chinese apparent demand for September upwards by more than 500,000 b/d.
Iranian oil output rose by an estimated 70,000 b/d in October despite tough new sanctions imposed on the country by Europe and the U.S. on the country's energy and banking sectors.
The sanctions target Iran's nuclear program and are aimed at bringing the country back to the negotiating table. The sanctions were broadened in October and targeted major Iranian oil and gas companies.
"With the bulk of Iranian crude now heading to Asia, however, the main impact of the new EU measures will likely be on the country's financial sector," the IEA said.
Non‐OECD oil demand is estimated to have grown by 1.4 mb/d, or 3.2 percent, year‐on‐year in the third quarter of 2012 (to 43.9 mb/d), it said.
"If confirmed, this non‐OECD expansion would mark the region's fastest growth since the first quarter of 2011," the IEA said.
"The risks to the non‐OECD demand forecast are skewed to the upside, with a more rapid economic recovery potentially driving additional demand for products," it added.
The IEA said it remained skeptical whether September's expansionary pace of Chinese demand could be maintained until it saw consistently robust Chinese growth.