IEA: Oil Prices May Fall Further as Demand Set to Slow

by Ship & Bunker News Team
Monday July 13, 2015

Low oil prices are expected to extend into 2016 as demand growth slows to 1.2 million barrels per day, according to the International Energy Agency (IEA). 

Demand is expected to have peaked in the first quarter of 2015 at 1.8 million barrels per day, though that amount is expected wane even as supply reportedly rose by 550,000 barrels per day in June of this year. 

The Organization of the Petroleum Exporting Countries (OPEC) is reportedly the main driver of the supply growth, as its supply hit three-year highs last month. 

"The oil market was massively oversupplied in the second quarter of 2015, and remains so today," the IEA said in a separate report.

"It is equally clear that the market's ability to absorb that oversupply is unlikely to last."

Meanwhile, non-OPEC supply is expected to fall as low oil prices and budget cuts take their toll, though the reduction is not expected to have much positive impact. 

"The bottom of the market may still be ahead," the IEA said. 

It was previously reported that weak oil prices have hit countries such as the U.S. and Russia hard, with much of Russia having anticipated a shipping slump and many rigs in the U.S. having been halted or shut down. 

Ship & Bunker News Team
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