Economy Watch: Global Oil Demand Forecast; Real Estate Revenues for Q2

The International Energy Agency lowers its global oil demand forecast; real estate revenues rose in the second quarter.

By Dees Stribling, Contributing Editor

In its Oil Market Report for September, which was released on Thursday, the International Energy Agency lowered its global forecast for oil demand for the third month running. The autonomous 29-nation organization called the recently drop in demand “nothing short of remarkable.”

The IEA predicts that oil demand growth for 2014 and 2015 will be 900,000 barrels per day and 1.2 million barrels per day, respectively, because of a sizable slowdown in demand growth during the second quarter. As recently as July, the agency predicted that demand growth in 2014 would be 1.2 million barrels per day.

Demand during the second quarter grew at its slowest pace in two and a half years because of economic weakness in Europe and China, a trend the IEA expects will continue to hurt demand. Saudi Arabia finally seems to be responding to the lower demand outlook, cutting production last month by 330,000 barrels per day; output appears to have run below 7 million barrels per day for the last four months, the kingdom’s lowest level since Sept. 2011.

Service Industry Revenues Rise

The Census Bureau on Thursday released its quarterly estimates for revenue across a variety of service industries. In real estate, revenue for the second quarter was $127.7 billion, up 7.7 percent from the first quarter, and 5.1 percent compared with a year ago. Accommodation revenue came in at $57.3 billion for the second quarter, up 12.2 percent from the first quarter but down 0.5 percent from the second quarter of 2013.

Transportation and warehousing revenue for the second quarter was $217.9 billion, up 8.7 percent quarter-over-quarter and 6.4 percent year-over-year. In health care, estimated revenue was $565.6 billion, an increase of 3 percent from the first quarter of this year and 3.7 percent from the second quarter of 2013.

In a separate report, the U.S. Department of Labor said on Thursday that initial unemployment claims for the week ending Sept. 6 came in at an annualized 315,000, an increase of 11,000 from the previous week. The previous week’s level was revised up by 2,000 to 304,000. The four-week moving average was an annualized 304,000, an increase of 750 from the previous week.

Wall Street ended the day mixed, with the Dow Jones Industrial Average losing 19.71 points, or 0.12 percent. The S&P 500 and the Nasdaq, by contrast, were up 0.09 percent and 0.12 percent, respectively.