Oil demand growth at decade low

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Global oil demand in the first half of 2019 grew at its slowest pace since 2008, hurt by increasing signs of economic slowdown. (Shutterstock)
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Updated 10 August 2019

Oil demand growth at decade low

  • Mounting signs of a global economic slowdown outweigh potential supply interruptions

LONDON: Mounting signs of an economic slowdown and a ratcheting up of the US-China trade war have caused global oil demand to grow at its slowest pace since the financial crisis of 2008, the International Energy Agency (IEA) said.

The IEA said global oil demand in the first half of 2019 grew at its slowest pace since 2008 hurt by mounting signs of an economic slowdown and a ramping up of the US-China trade war.

Rystad Energy said the oil market was going “from gloomy to gloomier,” calling into question the consultancy’s own bullish view for the first part of 2020.

“Economic recession risk and further escalation of the US-China trade war are key concerns in the near term. How long OPEC+ is willing to continue to manage production adds uncertainty,” said Bjørnar Tonhaugen, head of oil market analysis at Rystad Energy.

The Organization of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, agreed in July to extend their supply cuts until March 2020 to boost oil prices.

Russia’s energy ministry said IEA’s estimates were largely in line with its own forecasts and that Moscow had taken into account the possibility of a slowdown in oil demand when it extended an output cut deal with OPEC.

“Market focus in oil has clearly shifted. It is squarely on future demand, rather than on supply,” said Harry Tchilinguirian, global oil strategist at BNP Paribas in London.

Saudi Arabia plans to maintain its crude oil exports below 7 million barrels per day in August and September to bring the market back to balance and help absorb global oil inventories, a Saudi oil official said on Wednesday.

The UAE also will continue to support actions to balance the oil market, Energy Minister Suhail Al-Mazrouei said in a tweet on Thursday.

Oil prices rose on Friday, supported by expectations of more OPEC production cuts.

Brent crude futures were up 89 cents at $58.27 a barrel in early trade while (WTI) futures were at $53.33 per barrel, up 79 cents.

“Despite a further cut in oil demand growth by the IEA, oil prices are trading marginally higher, as the demand growth cut was already announced previously by the head of the IEA and the agency still expects larger inventory draws for 2019,” UBS analyst Giovanni Staunovo said.


Britain expects ‘very significant’ week for Brexit talks as clock ticks down

Updated 29 November 2020

Britain expects ‘very significant’ week for Brexit talks as clock ticks down

  • Despite missing several self-imposed deadlines, the negotiations have failed to bridge differences on competition policy and the distribution of fishing rights
  • Britain’s transitional EU exit agreement expires on Dec. 31, and Britain says it will not seek any extension

LONDON: Britain and the European Union are heading into a “very significant” week, British foreign minister Dominic Raab said on Sunday, as talks over a trade deal enter their final days with serious differences yet to be resolved.
EU negotiator Michel Barnier told reporters in London that “works continue, even on Sunday” on his way to a negotiating session, as both sides look for a deal to prevent disruption to almost $1 trillion of trade at the end of December.
“This is a very significant week, the last real major week, subject to any further postponement... we’re down to really two basic issues,” Raab told the BBC.
Despite missing several self-imposed deadlines, the negotiations have failed to bridge differences on competition policy and the distribution of fishing rights.
But Britain’s transitional EU exit agreement — during which the bloc’s rules continue to apply — expires on Dec. 31, and Britain says it will not seek any extension. A deal would have to be ratified by both sides, leaving little time for new delay.
“The bottom line is... in the ordinary course of things we need to get a deal done over the next week or maybe another couple of days beyond that,” Raab told Times Radio in a separate interview.
Earlier, he had signalled some progress on the ‘level playing field’ provisions which look to ensure fair competition between Britain and the EU, and said fishing remained the most difficult issue to solve.
Despite accounting for 0.1% of the British economy, fishing rights have become a totemic issue for both sides. Britain has so far rejected EU proposals and remains adamant that as an independent nation it must have full control of its waters.
“The EU have just got to recognize the point of principle here,” Raab told Times Radio.