IEA cuts oil demand growth estimates on 'deteriorating' economic environment

The International Energy Agency July 13 lowered its oil demand estimates for 2022 and 2023, citing a "deteriorating" economic environment, with particular weakness in road fuels and petrochemical demand.

In its monthly oil market report, the IEA highlighted weaker-than-expect demand from the US summer driving season and reduced its demand growth estimates by 100,000 b/d for both years to 1.7 million b/d and 2.1 million b/d, respectively.

The IEA said Organization for Economic Cooperation and Development demand weakness was being offset to an extent by emerging market recovery, led by China's cautious easing of pandemic measures.

On the supply side, the IEA raised its global supply forecast for 2022 by 300,000 b/d to 100.1 million b/d, citing Russia's supply resilience and predicted a somewhat later impact on Russian supply from EU sanctions.

The report warned of continuing global economic risks stemming from high prices and still "critically low" oil inventories and said stronger government measures to restrain demand were needed to limit threats to global recovery.