Oil demand growth estimates are being downgraded on expectations of further declines relating to increasing geopolitical tensions and concerns about the health of the global economy, according to separate reports from the International Energy Agency (IEA) and Norwegian consultancy Rystad Energy.

The Paris-based IEA revised down oil demand growth estimates for 2019 and 2020 by 100,000 barrels per day to 1.1 million bpd and 1.3 million bpd, respectively, while maintaining its global 2019 demand forecast at 100.4 million bpd.

“The outlook is fragile with a greater likelihood of a downward revision than an upward one,” the IEA said.

Rystad, meanwhile, expects even lower demand growth in 2020, amid a worsening of US-China trade relations, which could lower demand growth by 200,000 bpd to 1 million bpd.

On the supply side, the IEA said global oil supply held steady in July above 100 million bpd, but fell below year earlier levels for the first time since November 2017.

Rystad’s global production forecast for 2020 has been revised up by 500,000 bpd, led by the US and followed by Norway, China and Canada.

“Rystad still believes demand growth globally will improve in the second half of 2019, but the recent exchange of US-China trade tariffs and overall weak manufacturing, exports and trade indicators elsewhere in the world could cap demand growth recovery if we see no trade deal in the immediate future,” the consultancy said.

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Demand growth to slow up