IEA cuts 2015 global oil demand growth forecast

Expects oil prices to drop further; Brent trading at $88/barrel this month

The world will see much weaker oil demand growth in 2015 than forecast previously, the International Energy Agency said on Tuesday, adding it expected oil prices may drop further.

"Recent price drops appear both supply and demand driven. Further oil price drops would likely be needed for supply to take a hit - or for demand growth to get a lift," the agency representing industrialised nations said in a monthly report.

Oil prices fell for a third straight month in September and benchmark Brent prices declined to a near four year low of around $88 per barrel this month, on abundant supply, slowing demand growth and a strong US dollar.

The IEA said it had cut its 2014 oil demand growth estimate by 200,000 barrel per day to 0.7 million barrels per day (bpd) due to weaker economic growth and evidence of lower consumption.

In 2015, it expects demand to expand by 1.1 million bpd to 93.5 million bpd, up by 1.2% but 300,000 bpd less than previously forecast.

Brent has fallen by almost 25% since June, when turmoil in Iraq lifted prices close to $116 per barrel.