Mubasher: More indications of an economic downturn and escalating US-China trade conflict threw a wrench into global oil demand growth, slowing down to its lowest since the 2008 financial crisis, the International Energy Agency (IEA) warned on Friday.

In the period between January and May, oil demand grew by 520,000 barrels per day (bpd), the weakest growth figure recorded since the same period of 2008, the IEA said in its monthly report.

“The situation is becoming even more uncertain […] global oil demand growth has been very sluggish in the first half of 2019,” energy watchdog said.

Global consumption shed 160,000 bpd last May, compared with the same month last year. This marked the second annual drop so far this year, IEA said.

“The prospects for a political agreement between China and the US on trade have worsened [which] could lead to reduced trade activity and less oil demand growth,” the Paris-based agency warned.

Looking ahead, the IEA trimmed its global demand growth forecasts for this year and next to 1.1 million and 1.3 million, respectively.

The main downward contribution was estimated to come from China, which saw its demand growth at 500,000 bpd for the first half of the year, according to the IEA’s report.

In addition, oil consumption in the US and India came in at 100,000 bpd in the period between January and June.

“The outlook is fragile with a greater likelihood of a downward revision than an upward one,” the report said.

The agency revised down its oil demand growth outlook after the International Monetary Fund (IMF) downgraded its economic growth outlook last month.

The IMF expected the world’s economy to grow by 3.2% this year, slashing its April forecast by 0.1 percentage point and 0.3 percentage points below the fund’s growth projection at the beginning of the year.

By 12:46 pm GMT, US Nymex crude futures climbed by 1.22% to $53.18 per barrel (pb), while global benchmark Brent futures rose by 1.12% to $58.02 pb.