By Adedapo Adesanya
Uncertain trade relations between the United States and China will put further pressure on global oil demand in 2019, the International Energy Agency (IEA) has reported.
In its closely watched oil-market report, the IEA downgraded its forecast for global oil-demand growth for the third time in four months, lowering it to 1.1 million barrels a day from 1.2 million barrels a day. Demand for the January-to-May period was at its weakest since 2008.
While geopolitical tensions remain elevated in the Middle East between Western and Iranian naval forces, the IEA’s main focus was the economy.
The agency expressed growing alarm over the impact of the trade battle between the U.S. and China on both economic growth and oil demand, having cut its forecast in May and June.
“Now, the situation is becoming even more uncertain: The U.S.-China trade dispute remains unresolved and in September new tariffs are due to be imposed,” the report said.
West Texas Intermediate (WTI) Crude, the U.S. price benchmark, are still down 7 percent for the month as analysts weigh ongoing uncertainty about trade.
Brent crude oil, the global benchmark, was up 1.5 percent at $58.26 a barrel and U.S. crude was 1.5 percent higher at $53.31 a barrel. Both remain sharply down this month, though, having faced heavy selling amid escalating trade tensions.
Brent has dropped more than 10 percent in August, while U.S. crude is down 9 percent.
Worsening relations between the U.S. and China “could lead to reduced trade activity and less oil demand growth,” the report said.
Dipo Olowookere