The IEA Wednesday cut its global oil demand growth forecast for 2012, with the market dragged down by a weakening world economy and stubbornly high prices while the nuclear crisis with Iran deepens.
The International Energy Agency in its January monthly report cut its outlook for 2012 demand growth to 1.1 millon barrels per day from 1.3 mbpd, citing the impact of a fall in demand in the fourth quarter of 2011 of 300,000 bpd.
According to the IEA, demand will be divided between a declining appetite for oil in richer OECD countries, especially in Europe, and continued growing demand in developing countries, especially Asia.
The current standoff with Iran, faced with the prospect of an European Union oil embargo on fears Tehran is aiming to acquire nuclear weapons, has also "further dampened prospects" for demand, along with a mild winter in the northern hemisphere, the IEA said.
The IEA said oil prices, however, remained stable as "a rising likelihood of sharp economic slowdown" was offset by supply concerns linked at least in part to the Iranian crisis.