IEA forecasts oil demand to slow down again this year as crude prices slide to $45-barrel

oil 50 barrelCrude oil prices have eased to around $45 per barrel this month as a global supply overhang weighed and demand growth weakened, according to the latest Oil Market Report from the International Energy Agency.

After reaching a price of above $52 a barrel in June, Brent crude fell 14.5% in July due to combination of rising stockpiles and worries about the outlook for demand.

Benchmark N. Sea Brent crude had threatened to break below $40-barrel at the end of July after rallying from near-15 year lows in December 2015.

The IEA also says that global oil demand growth is expected to slow from 1.4 mb/d in 2016 to 1.2 mb/d in 2017, as underlying support from low oil prices wanes.

The 2017 forecast – though still above-trend – is 0.1 mb/d below previous expectations due to a dimmer macroeconomic outlook. The 2016 outlook is unchanged.

The IEA also said huge amounts of stored oil are putting pressure on prices. The report added: “The massive overhang of stocks is also keeping a lid on prices, with both newly produced and stored crude competing for market share in an increasingly volatile refinery margin environment.”

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