The IEA Just Cut Its Forecasts For Global Oil Demand

The IEA revised its June demand forecast for US oil product consumption up 235,000 barrels a day, indicating four of the first six months of the year saw gains.

That's the strongest sequential reading since 2011.

In its new report today, the Paris-based group also revised its full-year U.S. consumption forecast to +0.3% from 0.0%.

But the momentum will not continue into 2014, it says:

Despite this revision, which takes stock of the latest uptick in delivery patterns US demand remains projected to edge down over the medium term. Remarkably, while the US demand outlook for 2013 looks more upbeat, the IMF in its July World Economic Outlook has reduced its forecast of US GDP growth for 2014, to 2.7% from 3.0% in the April WEO. That adjustment, coupled with our own assessment of relatively high efficiency gains in 2014, bolsters the forecast of a 0.2% demand decline.

The agency also cut its global demand figures, with 2013 seeing a drop off of -30,000 barrels to +895,000 a day, and 2014 -100,000 to +1.1 million barrels a day, based on lower GDP forecasts from the IMF. Japan is expected to see declines as it eases back into nuclear following the Fukushima disaster.

Emerging-market demand will have overtaken OECD demand by the end of the year, it says, with sluggishness in China and India getting outweighed by booming demand in Latin American and former Soviet Union countries.

The report didn't have much to say on the effects of US shale production. It forecasts a +400,000 shale oil production gain to about 2.6 million barrels a day for 2H2013, with North Dakota reaching 900,000 barrels a day.