IEA sees oil demand slump on Europe, China slumps

The International Energy Agency said Thursday it cut its forecast for oil demand growth because of an economic slowdown in Europe and China.

IEA published its monthly oil market report for September, saying it trimmed oil demand growth for 2014 to 900,000 barrels of oil per day and 2015 to 1.2 million bpd.

IEA said in the report the assessment was made "because of a pronounced slowdown in demand growth in the second quarter of this year and a weaker outlook for Europe and China."

The World Bank in June said the Chinese economy was slowing down in part because of a "structural transformation." Data from the European Union show economies are barely growing, if at all.

The Organization of Petroleum Exporting Countries said in its oil market report it cut its demand expectations by the most in three years because North American markets need less foreign oil because of the shale boom.

In terms of supply, IEA said OPEC output was lower overall because of declines from Saudi Arabia and Iraq, though Libya was on the road to recovery. Non-OPEC supply, meanwhile, is set to increase by 1.6 million bpd this year, though that should decline by 300,000 bpd next year.