This year will mark the nadir of oil demand growth over the next five years, according to a new report from Fitch Solutions Macro Research.

This year will mark the nadir of oil demand growth over the next five years, according to a new report from Fitch Solutions Macro Research (FSMR).

“We forecast demand to grow by around 0.5 percent this year, rising to 0.8 percent in 2020. While this puts our growth forecasts signiﬁcantly below consensus, it is consistent with the excessive weakness we have seen in monthly data in the year to date,” FSMR analysts stated in the report.

“Demand has faced a perfect storm of global macro headwinds, fueling broad-based weakness from the top down, and a host of idiosyncratic barriers to growth, dragging on demand at the individual market level,” the analysts added.

In the note, FSMR analysts noted that developing markets in Asia had been an “outlier” and continued to post strong demand growth this year.

“While India and China have dominated in volume terms, growth has been fairly broad-based across the region,” the analysts stated.

“In contrast, developed markets – which have enjoyed some cyclical boosts to growth in recent years – are falling back into structural decline,” FSMR analysts added.

According to OPEC’s latest world oil outlook report, which was published earlier this month, global oil demand will hit 1.14 million barrels per day (MMbpd) in 2019 and 2020. This will then drop to 1.03 MMbpd in 2021, 970,000 barrels per day (bpd) in 2022, 920,000 bpd in 2023 and 850,000 bpd in 2024.

In the International Energy Agency’s (IEA) latest oil market report, which was released last month, the organization forecasts oil demand growth of 1 MMbpd in 2019 and 1.2 MMbpd in 2020. In July, the IEA revealed that oil supply exceeded demand by 900,000 bpd in the first half of 2019.

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