The global demand for oil will be lower than previously expected this year and next. The International Energy Agency (IEA) points out the escalation of the trade war between the United States and China. The lower expectation follows the downward adjustment in June.
“The chance that China and the US will reach a trade agreement has shrunk. As a result, trading activity will collapse and demand for oil will increase less rapidly,” the energy organization wrote. IEA also concludes that the outlook is “fragile”.
In addition, oil demand increased in the first five months of the year at a particularly slow pace. For the last time, growth was so weak in 2008, according to the IEA. Oil demand was even lower in May compared to the level a year earlier.
The oil price has been under pressure since the beginning of this month. New developments in the trade struggle such as the additional American taxes on Chinese goods and the fluctuations of the Chinese currency were to blame for this.