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IEA cuts oil demand growth forecasts for this year and next amid trade war tensions – CNBC

IEA cuts oil demand growth forecasts for this year and next amid trade war tensions – CNBC

Oil field workers tend to a pump jack.Ken Cedeno | Corbis News | Getty ImagesThe International Energy Agency (IEA) cut its global oil demand growth forecasts for this year and next on Friday, citing fears of an economic downturn as the U.S.-China trade war casts a shadow over markets.The energy agency now expects oil demand…

Oil discipline staff tend to a pump jack.

Ken Cedeno | Corbis Files | Getty Photos

The Global Energy Agency (IEA) minimize its international oil demand boost forecasts for this year and next on Friday, citing fears of an economic downturn as the U.S.China trade battle casts a shadow over markets.

The vitality agency now expects oil demand boost to reach 1.1 million barrels per day (b/d) in 2019 and 1.3 million b/d in 2020.

That constitutes a downward revision of 100,000 b/d for this year and 50,000 b/d for next year.

In its closely-watched month-to-month oil document, the IEA acknowledged there used to be “growing proof of an economic slowdown” with many gigantic economies reporting aged tainted domestic product (GDP) boost in the first half of of the year.

From January to Could, oil demand rose by 520,000 b/d, marking the lowest upward push in that length since the financial crisis in 2008.

“The narrate is becoming grand extra unsafe,” the IEA acknowledged, earlier than describing international oil demand boost in the first half of of the year as “very leisurely.”

‘Fragile’ outlook

“Meanwhile, the potentialities for a political settlement between China and the United States on trade have worsened. This is in a position to per chance well outcome in reduced trade exercise and fewer oil demand boost.”

Wanting forward, the IEA acknowledged the outlook for oil demand boost is “fragile,” with a increased probability of a downward revision than an upward one.

The Paris-essentially based vitality agency acknowledged its revisions to grease demand boost followed the Global Financial Fund’s (IMF) most novel downgrading of the industrial outlook.

The Washington D.C.-essentially based institute acknowledged final month that it expects the international economy to build higher by 3.2% in 2019. The revised economic boost decide is 0.1 percentage point decrease than the IMF had forecast in April and zero.3 percentage aspects beneath the fund’s boost estimate to begin with up of the year.

The IMF additionally revised international economic boost down to three.5% in 2020, down 0.1 percentage point from its old projection.

Oil prices collapse

The IEA’s most novel oil document comes rapidly after a flare-up in trade tensions between the enviornment’s two biggest economies.

World financial markets had been rocked over the final week, after President Donald Trump vowed to impose 10% tariffs on $300 billion price of Chinese language imports starting in September.

The tariff probability triggered a tumble in the Chinese language yuan and sparked fears of a international currency battle.

The raging trade dispute between Washington and Beijing additionally despatched oil prices plunging earlier this week, with international benchmark Brent indecent shedding to a seven-month low on Wednesday.

Brent traded at $57.forty eight Friday morning, up nearly 0.2%, while U.S. West Texas Intermediate (WTI) stood at $52.64, round 0.1% increased.

Both contracts have fallen bigger than 20% from peaks reached in April, Reuters reported, putting them in undergo territory.

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