In an ominous sign for the global economy, the International Energy Agency (IEA) has said a sudden drop in oil demand for the second quarter of 2014 is “nothing short of remarkable.”
The second quarter saw demand slow to below 0.5 million barrels per day, the lowest level in two and a half years.
The IEA has “revised down sharply” demand forecasts for 2014 and 2015 to 0.9 million barrels per day and 1.2 million barrels per day respectively citing a weaker outlook in both Europe and China. The agency fears Eurozone economies “are getting perilously close to deflation.”
Last week the price for Brent crude fell though $100 USD a barrel, the first time in 16 months. Since the peak in June, prices are down over 14 percent. West Texas Intermediate is trading around $91 per barrel, the lowest level in 7 months and down 12 percent from the peak.
China’s Factory Output Slumps
According to China’s Nation Bureau of Statistics, growth in China’s factory output fell to 6.9 percent in August yoy, the weakest growth since the 2008 recession. Growth is expected to slow further with Xu Gao, chief economist at Everbright Securities in Beijing saying “The August data may point to a hard landing. The extent of the growth slowdown in the third quarter won’t be small,”
» International Energy Agency says sudden drop in the global demand for oil ‘nothing short of remarkable’ – The ABC, 12th September 2014.
» China’s factory growth slows to near six-year low – The Sydney Morning Herald, 13th September 2014.