IEA cuts oil demand forecast

The International Energy Agency (IEA) predicted that oil demand will rise next year, but by a smaller margin than it previously expected.

In its latest oil market report released Friday, the IEA said demand will average 93.3 million barrels a day globally, up from 92.4 million barrels a day.

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The forecast is 230,000 barrels a day lower than the group’s previous estimate from November, making it the fourth time in five months that the IEA has cut forecasts.

The agency said that the strong United States dollar and additional subsidies in some countries have failed to increase the international demand, which has been dropping for months.

In terms of production, the IEA said countries outside of the Organization of Petroleum Exporting Countries will increase output more than it had predicted in November.

The rising production could make it difficult for some countries to store so much oil, it said.

The IEA said a main factor in its cut forecast is that tumbling prices are hurting producer nations, with Russia hurt the most due to sanctions from western countries.