IEA warns oil demand growth so far in 2019 lowest since 2008

IEA warns oil demand growth so far in 2019 lowest since 2008

"While some Saudi overtures of additional output restraint, a softening USA dollar and lift in global risk appetite are facilitating today's rally, we are not viewing this as the beginning of a sustainable advance by any measure", Jim Ritterbusch of Ritterbusch and Associates said in a note. The tension melted over globally, prompting central banks in India, Thailand and New Zealand - in rapid succession - to cut interest rates more deeply than expected.

The IEA estimates that OPEC's crude oil production was 29.7 million bpd in July. The International Energy Agency on Friday called the demand outlook "fragile". In view of the sliding oil prices, Saudi Arabia has contacted other oil producers to discuss a potential oil strategy response to the slumping price of oil, a Saudi official told Bloomberg on Thursday. "How long OPEC+ is willing to continue to manage production adds uncertainty", said Bjørnar Tonhaugen, head of oil market analysis at Rystad Energy.

A large-volume bullish options trade was reported just after 9 a.m.in NY, for 25,500 contracts - equivalent to 25.5 MMbbl. Brent prices peaked this year in April ($74.57) and WTI topped out at $66.30. Still, a cooling global economy and the U.S-China trade dispute are putting a brake on fuel demand, so even if global producers decide to cut output further, they may struggle to revive prices.

Crude has fallen about 7% this month as growing fears that the trade spat will expand into a currency war overshadow the risk of supply disruptions in the Middle East.

WTI for September delivery advanced $1.78 to $54.32/bbl on the New York Mercantile Exchange at 10:03 a.m.

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Global benchmark Brent crude rose as much as 3.2% to $58.01 on Thursday.

The IEA projects demand growth to reach 1.1 million barrels per day for the rest of 2019 and 1.3 million barrels daily next year - a combined decline of 150,000 barrels per day.

Saudi Arabia is reducing allocations despite strong consumption in all regions, the officials said. "I am confident that OPEC+ will continue" its strong compliance with agreed production levels, he said on Twitter.

Amid oil's slide, United Arab Emirates Energy Minister Suhail Al-Mazrouei insisted market fundamentals are good and prices are undergoing a "temporary overreaction" driven by speculation.

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