The global oil glut that has taken a toll on the budgets of many oil producing nations will persist into 2017, as oil supply is expected to continue outstripping demand, the International Energy Agency said in a recent report.
The report argues that oil markets will take “a while longer” to rebalance in light of the weakening demand in India and china and OPEC’s near record production offsets global output cuts led by the US.
“This supply-demand dynamic may not change significantly in the coming months,” the Paris-based agency said. “Supply will continue to outpace demand at least through the first half of next year.”
The report puts further pressure on big producers as they are trying to reach an agreement over an output freeze.
Earlier this week, OPEC forecasted that the market will remain awash with crude well into 2017 as the resilience of US shale industry and new streams of oil producers threaten to keep prices at their current levels.