Growth in global demand for crude is set to slow next year as the allure of cheap oil fades, the International Energy Agency (IEA) said on Friday.
The IEA now expects oil demand to grow by 1.2 million barrels per day (mbd) in 2016, after a five-year high of 1.8 mbd this year as cold weather and rekindled economic growth in some countries also boosted consumption.
"Momentum eases towards its long-term trend as recent props — sharply lower oil prices, colder-than-year-earlier winter weather and post-recessionary bounces in some countries — are likely to give way," the IEA said.
Developed countries have continued stockpiling oil and commercial inventories in OECD nations now stand at a record 3 billion barrels, the IEA said.
Growth in worldwide oil stocks slowed in the third quarter, but is still "significantly" above the historical average, it said.
"Stockpiles of oil at a record 3 billion barrels are providing world markets with a degree of comfort," the agency said, calling these stock levels "a massive cushion" and "an unprecedented buffer against geopolitical shocks or unexpected supply disruptions".
The IEA does not forecast oil price levels, but hinted at continuing pressure on the price, which has been languishing at well below $50 dollars per barrel.
"Oil market bears may choose not to hibernate," the IEA said, especially if forecasts for a mild winter in Europe and the United States turn out to be true.
"Bears" in financial market parlance are investors willing to bet on falling prices.
