THE world’s demand for oil is expected to slow in 2016 in response to a more pessimistic outlook for the global economy, likely keeping the crude market oversupplied, the International Energy Agency (IEA) said Tuesday.

    “Global demand growth is expected to slow from its five-year high of 1.8 million barrels per day (mb/d) in 2015, to 1.2 mb/d in 2016,” moving closer toward its long-term trend, the IEA said in its monthly oil market report.

    That will probably mean a continued oil supply glut next year, especially with the expected arrival of Iranian crude.

    “A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels — should international sanctions be eased — are likely to keep the market oversupplied through 2016,” it said.

    Citing the International Monetary Fund’s recent downward revisions on global growth estimates by one-fifth of a percentage point, “projections for commodities demand logically require some trimming,” the report said.

    Global consumption is expected to average 95.7 million barrels a day next year, down 100,000 from estimates in last month’s report.

    One surprise is the resilient oil demand in China despite its economic slowdown.

    “Our preliminary August estimate posted a near double-digit percentage point gain in year-on-year terms despite the otherwise ailing macroeconomic backdrop,” the Paris-based agency said.

    Crude oil prices were relatively stable in September and rallied early this month on “expectations of a lower U.S. output and rising tension in the Middle East,” the IEA said.

    The IEA, which analyses energy markets for advanced oil-consuming nations, noted that oil prices at US$50 per barrel was “a powerful driver in rebalancing the global oil market, but the big question is just when will equilibrium be restored.”

    Russia’s military intervention in Syria has raised international political tensions and created uncertainty — although for now the global oil supply glut is tempering market reaction.

    “Some of this uncertainly may start to clear next year although, considering Iran, the market may be off balance for a while longer,” the report said.

    Crude output by the 12-nation OPEC cartel rose by 90,000 barrels a day to 31.72 million in September driven by Iraq, now the world’s biggest source of additional supply.(SD-Agencies)