On Thursday, IEA released its April Oil Market Report. The International Energy Agency (IEA) trimmed its forecasts for global oil demand in 2013 for a third consecutive month. The expectation cuts were provoked by weak demand for crude oil and negative prospects about the global economic outlook.
IEA reduced its outlook for global oil-demand growth from a previous forecast of 820,000 to 795,000 barrels a day barrels a day. This brought more market concerns that demand is falling.
The bearish IEA outlook reflected in weak demand from industrialized countries with Europe in particular. In the Euro Zone oil consumption during this year is projected to face the lowest since the 1980s.
Despite the reduction, analysts believe that the forecast hasn’t changed much. The update adds only a 0.05% cut of demand, which is insignificant in global terms. However the supply-demand picture for the rest of the year is still relatively pessimistic. It is very likely that the ongoing geopolitical worries would remain a major topic of the market in 2013.
The IEA forecast underlined the declining OPEC production and additional exports slump from Iran. In respect the agency sees the global crude demand as subdued.
The IEA projection came one day after the Organization of the Petroleum Exporting Countries trimmed its global crude demand expectations for a second time in two months. OPEC now expects that in 2013 oil demand will be 800,000 barrels per day. The forecast is 40,000 barrels lower than the previous projection.
In a report issued Wednesday OPEC also cut down its global oil-demand outlook. In March the crude output from the Organization of the Petroleum Exporting Countries has dropped. From a month earlier OPEC production fell by 170,000 barrels to 30.25 million barrels per day.
According to IEA it could be too hasty to call for a bear market. That is due clues that suggest that the recent easing of upward price pressures may be swift. IEA keeps its constructive position citing that crude prices would avoid the bear market. This claim finds support from expectations that Saudi Arabia will resolve lower output while Asian demand remains in robust level.
