World oil demand will grow less quickly than expected this year because of slower economic growth in the United States, the International Energy Agency said today.
The IEA, adviser to 27 industrialised countries, forecast in its monthly Oil Market Report that world oil demand growth would average 1.67 million barrels per day (bpd), down 310,000 bpd from its previous estimate.
"It's a big shift in demand growth," said Lawrence Eagles, head of the IEA's Oil Industry and Markets division. "A little bit of that is due to higher demand in 2007, but the biggest chunk is because of weaker economic growth, mainly in the developed economies and particularly the United States."
The IEA also pointed to low inventories and political tension, which are supporting oil prices. Venezuela stopped oil exports to Exxon Mobil yesterday, escalating a fight with the US company.
Stocks in member-countries of the Organisation for Economic Co-operation and Development fell by 39.5 million barrels in December, although there was some increase in January, the IEA said. Weak margins prompted oil refiners to reduce crude oil processing in January and February - the most extensive economic run cuts for five years, the agency said.
The IEA co-ordinates the release of crude oil and refined product from emergency reserves in the event of a major supply disruption. The head of the agency said on Tuesday he was concerned by Venezuela's decision to stop oil sales to Exxon Mobil and was watching the situation closely.
"We have the concern on the physical side of the event and are carefully watching," IEA Executive Director Nobuo Tanaka told reporters. "If there is a risk of a physical disruption we are happy to move," Mr Tanaka said.