IEA: Oil demand slows down considerably

Oil demand will rise more slowly for the rest of the year and beyond. The International Energy Agency expects the US, China and Europe to need far less than expected in early 2012, with prices likely to fall. Faltering economic growth will undercut global oil demand in the remaining months of this year and throughout 2013, the International Energy Agency (IEA) said in its monthly oil market report on Friday. Demand will increase more slowly than expected in China, the US and Europe, the West's energy watchdog claimed, trimming its 2013 forecast by 400,000 barrels per day in the light of a slowdown in global economic activity. The forecast downgrade was the IEA's fourth this year, after announced cuts in January, February and June. "The biggest part of the decline is due to a deceleration in economic growth in China which will consume much less oil this year and next," the watchdog said in a statement. Consumers to benefit? The IEA echoed pessimistic forecasts earlier in the week by the US administration and the Organization of Petroleum Exporting Countries (OPEC). All three bodies emphasized oil stocks were being filled up, offering a sizeable cushion to cope with any unexpected shock to supplies and possibly leading to lower fuel prices as a result. Oil prices were already lower in early Friday trading, with fresh data about slower growth in China adding to concerns that the Asian giant kept losing momentum. The IEA said Iranian oil output had continued to fall as western sanctions over its disputed nuclear program tightened, with July production sinking to 2.9 million barrels per day, down from 3.6 mbpd in the same month last year.