Demand spurt as oil prices tumble 25%

Crude prices fell in July and August, but forecasts show demand will be stronger than anticipated

Crude prices fell sharply during July and into early August, weighed down by an abundant supply and a strong US dollar. By early August, global benchmarks had sunk around 25% below end June levels. As Petroleum Economist went to press, Brent was trading just under $50/barrel, while WTI was trading just over $43/b. The International Energy Agency’s (IEA’s) latest forecast shows stronger-than-anticipated demand and non-Opec supply growth swinging into contraction next year. While a rebalancing has clearly begun, the process is likely to be prolonged as a supply overhang is expected to persist through 2016 – suggesting global inventories will rise further. During the second half 2015 the IEA se