It reiterated that pilgrims require a Haj visa and it can be obtained through recognised official channels
Global oil demand growth will come to a halt in the final three months of this year as an economic slowdown deepens, and with supply outpacing demand into the second quarter of 2023, there should be a much-needed build in stocks, the International Energy Agency (IEA) said on Wednesday.
The Paris-based institution said demand growth is being stymied by Covid-19 lockdowns in China and slowing OECD economies.
Oil prices edged lower on Wednesday on demand concerns raised by the prospect of further increases to interest rates in an effort to tackle rising inflation in Europe and the United States.
Brent crude futures fell by 34 cents, or 0.36 per cent, to $92.83 a barrel by 1220GMT. US West Texas Intermediate crude was down 32 cents, or 0.37 per cent, at $86.99.
The European Central Bank’s chief economist, Philip Lane, on Wednesday repeated the bank’s pledge to continue raising interest rates with its focus on inflation.
Higher energy prices remain a “dominant driving force of inflation” in the euro zone, Lane said. A hotter than expected US inflation report on Tuesday also dashed hopes the Federal Reserve could scale back its rate policy tightening in the coming months.
In its new Oil Market Report (OMR), the IEA expects large-scale switching from gas to oil, estimated to average 700,000 barrels per day (bpd) in October 2022 to March 2023 - double the level of a year ago. The IEA said global observed inventories fell by 25.6 million barrels in July.
The IEA cut its demand growth forecast for this year by 110,000 barrels per day (bpd) to 2.0 million barrels per day from 2.1 million b/d in its previous report. It said demand growth has slowed from 3.5 million b/d in the first half of this year to 1.1 million b/d in the current quarter. This will come "grinding to a halt" in the October-December period when it expects demand from OECD countries to contract. The report kept its 2023 growth forecast of 2.1 million bpd.
The outlook maintains a relatively bullish view for robust growth next year despite economic headwinds, built on the expectation that China’s Covid lockdowns will ease while growth in air travel will boost jet fuel demand.
“Global oil demand remains under pressure from the faltering Chinese economy and an ongoing slowdown in OECD economies,” the Paris-based energy watchdog said in its monthly oil report.
On supply, the IEA forecasts 4.8 million bpd growth this year, to 100.1 million bpd, and 1.7 million b/d growth in 2023, to a record 101.8 million bpd. Saudi Arabia and the US will drive much of this. The IEA's estimate for the call on Opec+ crude in the current quarter is more than one million bpd below what the group produced in August.
Oil hit the lowest since January earlier this month as traders attempted to price in a possible global slowdown, tighter monetary policy, and lower energy demand. The potential for further interest rate hikes has bolstered the case for slower growth, while commodity markets broadly are wrestling with lower liquidity.
“The market seems to be well and truly stuck with no clear direction for the time being,” said Ole Hansen, head of commodities strategy at Saxo Bank.
Russian oil exports are set for a bumpy ride as the European Union plans to impose a ban on maritime services transporting it on December 5. The ban will push Russian oil production down to 9.5 million bpd by February next year, the IEA said, a 1.9 million bpd drop compared to February 2022. A plan by G7 countries to cap Russian oil sales prices and not ban the trade may ease those losses.
— issacjohn@khaleejtimes.com
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