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IEA cuts outlook for global oil demand as crude nears US$80 a barrel
[LONDON] Global demand for oil is likely to moderate this year, as the price of crude nears US$80 a barrel and many key importing nations no longer offer consumers generous fuel subsidies, the International Energy Agency said on Wednesday.
The Paris-based IEA cut its forecast for global demand growth to 1.4 million barrels per day for 2018, from a previous estimate of 1.5 million bpd.
The oil price has risen 51 per cent in the last year, driven by coordinated supply cuts and, this month, by concern over Iranian supply after the United States said it would reimpose sanctions on Tehran over its nuclear activities.
"It would be extraordinary if such a large jump did not affect demand growth, especially as end-user subsidies have been reduced or cut in several emerging economies in recent years," the IEA said.
Oil inventories in the world's richest nations, the most transparent and easy to track, have now fallen 1 million barrels below the five-year average, the level targeted by the Organization of the Petroleum Exporting Countries and its partners, as the group restrains crude output for a second year.
"For now, the rapidly changing geopolitical landscape will move the attention away from stocks as producers and consumers consider how to limit volatility in the oil market," the IEA said.
"For its part, the IEA will monitor developments closely and is ready to act if necessary to ensure that markets remain well supplied."