NEW YORK (Dow Jones) - The International Energy Agency said Tuesday that tight global oil demand and supply balance, which has helped push up crude prices to record highs, is easing as higher prices and slower economic growth in developed countries curbs oil demand.
Global oil demand for this year is expected to stand at 86.9 million barrels a day, unchanged from the previous month's forecasts, the IEA said in an August monthly report. Oil supplies, on the other hand, are expected to remain strong. The world produced 87.8 million barrels of oil in July, up 890,000 barrels from the previous month, the IEA said.
"The slowdown in demand related to the general economic downturn and high oil prices is becoming increasingly evident," the IEA said in the report. "Consumers clearly are reacting by a change in [driving] behavior."
Easing fundamentals have pushed oil prices about $30 dollars a barrel, or 20%, lower than their record high above $147 hit in early July. Crude was trading around $114 a barrel on the New York Mercantile Exchange on Tuesday.
The IEA, however, also cautioned against "complacency", as "it looks too early to cite definitively a sea change in the market."
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