Global oil demand growth faces headwinds: IIF

Global oil demand growth is expected to decelerate from 1.1 million barrels per day (mbd) in 2018 to 1.0 mbd in 2019 and 0.9 mbd in 2020, the Institute of International Finance (IIF) noted in its report on Wednesday.

IIF noted that growth in global demand for oil continues to be dominated by emerging and developing economies, with China accounting for half of the incremental increase and India one-fourth.

“Slower global growth, in the context of escalation of the trade war between the US and China, could mean slower oil demand growth in 2019 and 2020,” it maintained.

The recent increase in inventories in the US and other major OECD countries raises concerns that the weakening of growth in the OECD and China will dampen the demand for oil, IIF added.

The range of uncertainty over the price of oil for the rest of 2019 and 2020 remains large, IIF noted, adding that “despite the elevated uncertainty ensuing from the drone attacks in Saudi Arabia, Brent oil futures price expiring in December 2020 remained stable around $60 a barrel”.

All three of the world’s largest oil consumers — the US, China, and Japan — possess ample strategic reserves that they can harness on a limited basis in response to acute supply disruptions, IIF maintained.