Global crude oil demand continues to decelerate: IEA

Global crude oil demand continues to decelerate: IEA

New Delhi: Growth in global crude oil demand continues to decelerate, weighed down by renewed Chinese lockdowns and an ongoing slowdown in the OECD region, global energy body International Energy Agency said in its latest report.

"Persistent demand weakness in China considerably slowed the pace of a summer ramp-up in refining activity. After reaching a post-Covid peak in August of 81.4 million barrel per day, refinery throughputs are expected to fall in September-October on seasonal maintenance," it said. With lower runs (the volume of crude oil consumed by refineries), refined product inventories are now unlikely to see any substantial builds for the remainder of the year.

Brent crude oil futures prices slipped below USD 90 per barrel in early September, the lowest level since January and more than USD 34 barrel below a June peak. This is the largest 90-day decline since March-April 2020 and is only exceeded prior to 2020 by market routs in 2014-15 and 2008-09.

For now, a deteriorating economic environment and recurring Covid lockdowns in China continue to weigh on market sentiment, it said.

However, the deceleration in crude oil intake is partly offset by large-scale switching from gas to crude oil, estimated to average 700 kb/d during October-December 2022