According to the International Energy Agency’s Monthly Oil Market Report, global demand for oil usage has been adjusted slightly downward, as persistent economic uncertainty and sustained high oil prices have simultaneously thwarted demand’s previous trek upward.
While global economic growth assumptions remain basically unchanged for 2011 and 2012, weakness in 3Q2011 has sparked concern. IEA estimated global demand in September, albeit based on preliminary data, as flat compared to the same month in 2010. This follows growth of 1.4% in August. If this result holds, it would signal the weakest monthly demand growth since October 2009.
Nevertheless, the forecast revisions are moderate, as IEA cut 2011 by 70 kb/d and lowered 2012 by only 20 kb/d, with an upward baseline revision to 2010 of 20 kb/d, primarily due to Syria, providing some offset. The short-term oil demand picture remains cautious but stable. Recent weaker‐than‐expected data for China, the US and Japan, led to combined downward revisions in September of 670 kb/d. IEA did caution, as it habitually does, that the outlook could sour significantly if economic prospects falter.