The International Energy Agency (IEA) has improved its forecast for oil demand, citing stronger-than-expected demand growth in China.
The IEA warned that the current market pessimism - namely, the fourth consecutive weekly decline in oil prices due to concerns about a possible recession - contrasts sharply with the tighter market balance expected in the second half of the year, when demand is likely to exceed supply by almost 2 million barrels per day. This situation, according to many analysts, will lead to an increase in oil prices.
The IEA forecast also pointed to a widening gap between the growing demand for crude oil in developing countries and weak demand in Europe and North America.
Overall, the IEA raised its forecast for global oil demand growth this year to 2.2 million barrels per day (+200,000 barrels per day compared to the previous forecast presented in April). The total demand, according to the IEA forecasts, will be 102 million barrels per day (+100,000 barrels per day compared to the previous forecast). The IEA expects that China will account for 60% of all oil demand growth this year.