According to the International Energy Agency (IEA), within the next three months, world oil spending will top 100 million barrels per day (bpd). This rise in spending is forecast to put pressure on rising prices, but issues in the market and disagreements surrounding trade may affect demand. The IEA forecasts demand to grow 1.4 million bpd in 2018 and 1.5 million bpd in 2019.

The balance between supply and demand has been tightening due to declining output in Venezuela and the US sanctions on the energy industry of Iran, which are to be implemented in November but have already cut back oil supply to lows not seen in two years. According to the IEA, the trade war between the US and China has unsettled equity markets and the rising US dollar is pressurizing currencies of emerging markets, which is costing leading global oil importers more than usual. Oil demand from non-OECD countries is estimated to grow 1.1 million bpd this year and 1.2 million bpd to 52.8 million bpd in 2019. This demand from non-OECD countries is led by China and India.

In the fourth quarter of 2018, global oil demand is forecast to reach 100.3 million bpd before stabilizing at around 99.3 million bpd in the first quarter of 2019. Demand for crude oil from the Organization of the Petroleum Exporting Countries will settle at 31.9 million bpd in 2019, down 1.2% from 2018 levels.

Source: Reuters