SHARE
Image courtesy of Martyn Gorman/Geograph.

The International Energy Agency (IEA) dropped its global demand growth forecast by 22 percent as consumption slows and production continues to climb.

The revised forecast is down by about a fifth since from previous projections.

Global demand is expected to drop by 200,000 barrels per day to 700, 000 barrels per day due to weak consumption trends and curbed economic growth in Europe and Asia.

Despite lower demand OPEC members boosted production to a 13-month high in September. OPEC members are set to meet next month to discuss output levels and prices.

Faced with mounting supplies and slowing demand OPEC members have been cutting prices to hold on to their market shares, the Wall Street Journal said.

Saudi Arabia and Kuwait, two of the largest OPEC producers, have said they won’t pull output back despite weak demand growth projections.

Non-OPEC producers also bumped up production by 2.1 million barrels per day in September.

Skyrocketing production and weak demand have kept crude prices below $100 per barrel since late July.

However, the IEA said existing U.S. shale projects should be insulated from the price drops, with the majority of projects breaking even at the $80 per barrel or less mark.

Hydrocarbon liquids production in the United States is projected to climb 20 percent over last year to 12 million barrels per day in 2015.

Global refinery crude demand also hit record highs in August with demand reaching about 79 million barrels per day.