IEA Lowers 2014 Oil Demand Growth Forecast

World oil demand will rise less than previously thought in 2014, due to a lower outlook for the global economy and demand growth in the second quarter falling to its lowest level in more than two years, the energy watchdog said Tuesday.

In its monthly oil-market report, the International Energy Agency--which advises industrialized nations on oil policies--trimmed its projection for growth in global demand this year to 1 million barrels a day, down 180,000 barrels a day, citing weaker-than-expected demand in the second quarter.

"Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin," the report said.

"Remarkably low oil deliveries in both Europe and North America helped slash this report's estimate of global demand growth for the second quarter of 2014 to less than 700,000 barrels a day year‐on‐year -- a low of more than two years," it said.

Demand, however, is expected to accelerate by 1.3 million barrels a day in 2015 as the global economic conditions improve, the Paris-based IEA said. That is 90,000 barrels a day lower than its previous forecast due to weaker economic growth in China and Russia and raised expectations for non‐oil power sector use in Japan.

The report also showed crude output from the Organization of the Petroleum Exporting Countries rose by 300,000 barrels a day in July to 30.44 million barrels a day led by higher supply from Saudi Arabia and a tentative recovery in Libya.

The estimated demand for crude from OPEC's 12 members, or "call on OPEC," will average 29.9 million barrels a day, down from 30 million barrels per day this year, according to IEA estimates.

Write to Summer Said at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires