International Energy Agencys (IEA) latest oil market report said global oil consumption is slowing down as questions marks over the state of the global economy resurface.
In its monthly oil market report, the IEA said financial and economic headwinds were gathering momentum and the oil market supply-demand balance could ease in the short term if recent supply disruptions receded.
"It is possible that we could see an easing in the tightness of the market in the months ahead," said David Fyfe, head of the IEA's oil industry and markets division.
The IEA cut its estimate of global oil demand growth this year by 160,000 bpd to 1.04 mbpd and trimmed its 2012 demand growth estimate by 190,000 bpd to 1.42 mbpd. Oil demand growth will slip to a much weaker 0.7 mbpd and 0.4 mbpd in 2011 and 2012 respectively.
Forecast
The IEA argued that the focus has now switched more to supply, amid slowing demand growth in 1H11. "We estimate that supply lagged demand by over 0.5 mbpd in 1H11."
The IEA raised its forecast for Libyan crude oil production capacity by the end of this year and said Opec oil output had also risen, helping increase industry inventories in the developed industrialised economies.
