Global oil demand predicted to drop

Worries about the health of the economy and increasingly uncertain trade relations between the U.S. and China will put further pressure on global oil demand in 2019, the International Energy Agency said Friday.

In its closely watched oil-market report, the IEA downgraded its forecast for global oil-demand growth for the third time in four months, lowering it to 1.1 million barrels a day from 1.2 million barrels a day. Demand for the January-to-May period was at its weakest since 2008, reports David Hodari of the Wall Street Journal.

The tariff dispute between the U.S. and China has already sent oil prices plunging in large part because of worries about a severe global economic slowdown and potentially even a U.S. recession, reports CNBC.

International benchmark Brent crude traded at $57.31 Friday morning, down around 0.15 per cent, while U.S. West Texas Intermediate (WTI) stood at $52.50, almost 0.1 per cent lower.

Both crude contracts fell to their lowest level since January on Wednesday.

Chinese buyers recently rekindled their interest in U.S. crude, as imports climbed to a nine-month high of 247,000 barrels per day in May, according to figures from the Energy Information Administration (EIA).

However, Stephen Brennock, oil analyst at PVM OIl Associates, told CNBC that the latest ramp-up in trade tensions would most likely reverse the trend.