source Emergy Mix Report on Oct 7, 2019
The International Energy Agency (IEA), may likely cut its growth estimates for global oil demand for 2019 and 2020, if the global economy weakens further, its chief said at the weekend.
The Paris-based agency trimmed in August its global oil demand growth estimates for 2019 and 2020 to 1.1 million and 1.3 million barrels per day (bpd), respectively, as trade woes weighed on global oil consumption, making demand grow at its slowest pace since the financial crisis of 2008.
â€œIt will depend on the global economy. If the global economy weakens, for which there are already some signs we may lower oil demand expectations,â€ Fatih Birol told Reuters on the sidelines of the World Knowledge Forum in Seoul.
He said Chinaâ€™s economic growth, which has fallen to the lowest in nearly three decades, could also mean there would be some revisions, as Beijing is â€œan engine of the demand growth.â€
Chinaâ€™s economic growth slowed to 6.2 per cent in the second quarter, its weakest pace in at least 27 years, dragged down by weaker demand amid heightened trade tensions with the United States. â€œBut at the same time, we shouldnâ€™t forget low oil prices also put upward pressure on the demand,â€ the IEA chief said.
Global crude benchmark Brent is hovering around $62 a barrel, while US West Texas Intermediate is sitting around $56, weighed down by worries over slowing global economic growth that could dent oil demand. Asked about how Asian importers could increase their energy security in the midst of heightened tensions in the Middle East, Birol said diversifying oil and natural gas imports as much as possible is a way to cope with geopolitical risks.
â€œEspecially for natural gas, this is a very lucrative time to diversify. Buyers hands are much stronger,â€ he said. â€œDefinitely itâ€™s a time to make new contracts and good prices competition now itâ€™s not among buyers but among sellers.â€
A day earlier, the IEA chief said liquefied natural gas (LNG) investments hit a record of $50 billion in 2019, driven by Canada and the United States.
Oil prices fell on Monday, extending last weekâ€™s heavy losses, with traders fearing the global economic slowdown will weigh on future oil demand growth while pegging hopes for a rebound on progress in talks this week on ending the U.S.-China trade war. Brent crude futures LCOc1 edged down 28 cents to 58.09 dollars a barrelâ€¦
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