A faltering China and a slowdown in advanced economies will lead to growth in global oil demand grinding to a halt in the fourth quarter, the International Energy Agency has forecast.
The Times said today that a slowdown in economic activity will outweigh the impact of a surge in demand for oil for use in power generation as European nations switch to burning the fuel to replace Russian gas this winter.
Oil prices dipped below $90 a barrel this month, the lowest level since January and more than $30 below highs recorded in June, as “a deteriorating economic environment and recurring Covid lockdowns in China continue to weigh on market sentiment”, according to the agency’s monthly oil market report.
In New York last night Brent crude, the international benchmark price, was 1% higher at $94.10 a barrel.
“Global oil demand remains under pressure from the faltering Chinese economy and a slowdown in Organisation for Economic Co-operation and Development economies. Growth continues to lose momentum,” it said.
The agency expects growth to slow from 3.5 million barrels per day in the first half of 2022 to 1.1 million in the third quarter before “grinding to a halt in the fourth quarter of 2022”.
The slowdown will come despite evidence of “large-scale switching from gas to oil”.