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Oil demand growing at fastest rate for five years

Global demand for oil is expected to grow by 1.6 million barrels a day (mb/d), the fastest pace for five years.14 Aug 2015

The growth is due to economic growth and to consumers responding to lower oil prices, the International Energy Agency (IEA) said. The agency expects growth in demand to continue in 2016, at 1.4 mb/d, it said.

Oil supply fell by nearly 0.6 mb/d in July, the IEA said, due to lower output in non-OPEC (Organisation of the Petroleum Exporting Countries) countries. Lower prices and spending cuts are expected to hit this further, causing non-OPEC growth to slow to 1.1 mb/d this year and then by a further 200 thousand barrels a day (kb/d) in 2016, it said.

OPEC's production of crude held steady at a near three-year high, falling slightly by 15 kb/d in July to 31.79 mb/d, the IEA said. Output in Saudi Arabia eased, which offset record Iraqi production and increased Iranian production, the agency said.

Inventories rose by 9.9 million barrels to an all-time high of 2,916 million barrels in June, the IEA said.

The fall in oil prices has led to the cancellation or delay of $100 billion worth of projects by the world's energy companies. Royal Dutch Shell, BP, ConocoPhillips and Statoil are among companies who have made moves to cut spending on 26 major projects worldwide.   
An Ernst and Young report released in March said that the value of global oil and gas deals rose sharply in 2014 but deal volumes fell, mainly due to a 50% fall on oil prices between the middle and end of the year.