US DOE-EIA: “recent slowdown in oil demand is nothing short of remarkable”: lower crude oil prices? Does it mean slightly more pressure on corn prices? 9/11/2014

IEA Cuts Oil Estimate as Saudi Exports Drop to ’11 Low 


By Grant Smith

     Sept. 11 (Bloomberg) — The International Energy Agency cut its global oil demand forecasts for 2015 and said Saudi Arabia exported the least in almost three years amid slowing purchases from China and Europe.

     Global demand will increase by 1.2 million barrels a day, or 1.3 percent, to 93.8 million barrels a day next year, the Paris-based adviser to 29 nations said in a report today. The expansion is 165,000 barrels a day less than it predicted a month ago. Second-quarter growth in consumption slid to a 2 1/2 year low, spurring Saudi Arabia to export the least since September 2011.

     “The recent slowdown in demand growth is nothing short of remarkable,” the IEA said. “While demand growth is still expected to gain momentum, the expected pace of recovery is now looking somewhat more subdued.”

     Brent crude futures slipped below $100 a barrel this week for the first time in 14 months amid booming U.S. shale output, constrained demand and speculation that crises in Iraq, Libya and Ukraine will spare oil supplies. U.S. production is poised to hit a 45-year high next year, according to the Energy Department.

     The IEA said it curbed its 2015 estimates in anticipation of weaker economic growth forecasts from the International Monetary Fund in October. Next year’s demand projections for China were cut by about 100,000 barrels a day, to 10.6 million a day.


                        Growth Revisions


     Second-quarter demand growth fell to 480,000 barrels day, the first time in about two years that it’s been below 500,000 barrels, the IEA said. The slowdown fed into forecasts for growth in the third quarter, curbed to 800,000 barrels day from the 1.1 million a day predicted last month. The IEA forecast as recently as June that third-quarter growth would be 1.4 million barrels day.

     The IEA cut its projection for demand growth in 2014 by

150,000 barrels a day because of weaker performance in China and Europe, forecasting that worldwide consumption will expand by

900,000 barrels a day to average 92.6 million this year.

     The agency lowered estimates for the amount of crude that the Organization of Petroleum Exporting Countries will need to produce by 200,000 barrels a day for this year and 300,000 a day in 2015.

     Output from OPEC’s 12 members slipped by 130,000 barrels a day in August to 30.3 million a day as lower production from Saudi Arabia and Iraq countered a recovery in Libya, according to the report. That leaves group output about 300,000 barrels a day below the average level needed in the fourth quarter, and

700,000 a day more than the amount required in 2015, the report showed.


                           Saudi Cuts


     Saudi Arabia, OPEC’s biggest member, cut production by

330,000 barrels a day to 9.68 million a day in August, according to the IEA. The nation exported 6.95 million barrels a day in June, and preliminary data indicates a “sharp drop” in shipments in August. Exports to the U.S. slipped to 1 million barrels a day in June, compared with an average of 1.4 million a day in the first five months of the year.

     The kingdom said in a submission to OPEC that it reduced production in August by 408,000 barrels a day to 9.6 million a day, the organization’s monthly report showed yesterday.

     Iraq’s production fell last month to the lowest level since January as bad weather disrupted loadings from the south of the country, declining by 60,000 barrels a day to 3.1 million day, according to the IEA. Libyan output recovered by 110,000 barrels to 530,000 barrels a day.

     “While festering conflicts in Iraq and Libya show no sign of abating, their effect on global oil market balances and prices remains muted amid weakening oil demand growth and plentiful supply,” the IEA said.

     The IEA boosted estimates for non-OPEC supply this year by

100,000 barrels a day, and the same amount in 2015. Supply from non-OPEC producers, led by the U.S., Canada and Brazil will increase by 1.3 million barrels a day next year to 57.6 million a day.




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