Energy Agency Again Cuts Estimate for Oil Demand in 2015

WASHINGTON (Los Angeles Times/TNS) -

The International Energy Agency on Friday cut its forecast for global oil demand next year, as prices continued to plunge because of oversupply and weak economies around the world.

The organization said demand would grow by 900,000 barrels a day to 93.3 million barrels a day.

The estimate is down 230,000 barrels a day from November and was the fourth time in five months the agency had reduced its 2015 forecast.

Several years of record- high oil prices led to a surge in production from the U.S., and other nations not part of the Organization of the Petroleum Exporting Countries, while at the same time consumption has fallen because of a weaker global economy, the IEA said.

And the oil market could be volatile for a while, the agency said.

“Barring a disorderly production response, it may well take some time for supply and demand to respond to the price rout,” the IEA said, in its monthly oil market report.

Crude oil prices have plunged in recent months, to their lowest in five years. The drop has pushed down average gas prices nationwide below $3 a gallon, with some stations selling it for less than $2.