Global demand for oil will be weaker for the rest of the year and into next year as global economic growth expectations remain weak, according to the latest report from the International Energy Agency (IEA).
Oil Barrels
The IEA revised its expectations for global GDP (gross domestic product) growth downwards to 3.9 percent in 2011 and 4.2 percent for 2012, down from 4.2 percent and 4.4 percent respectively with "significant downside risks".
Global oil demand was therefore revised down, albeit only marginally in terms of total oil production by 200,000 barrels a day for the rest of 2011 and further still in 2012 by 400,000 barrels a day.
"Oil demand growth is trimmed as a result, now averaging 1.0 million barrels per day this year and 1.4 million barrels per day next," the IEA said in its September Oil Market Report .
Demand is also expected to be weaker as a result of reduced demand from non-OECD countries including Asia and Latin America.
The reports states that power generation needs in Japan and the Middle East as well as a recovery in Libyan demand should provide some offsetting support to this decline, but the significant economic threats skew the overall demand side to the downside.
However, oil prices have remained stubbornly high relatively against a backdrop of economic weakness particularly in developed economies.
The IEA suggests this calls into question the exact drivers of prices.