Global oil glut to remain in 2016

International Energy Agency says in addition to Iran’s comeback to oil markets, global slowdown will contribute to glut in oil markets

Photo by: Reuters
Photo by: Reuters

A worker fills a car with gasoline at a Brazilian Oil Company Petrobras gas station in Rio de Janeiro, Brazil, September 30, 2015

A global oil supply glut will persist through 2016 as demand growth slows from a five-year high and key OPEC producers maintain near-record output, the International Energy Agency said on Tuesday, even as low prices curb supply outside OPEC.

The IEA, which advises the United States and other industrialised countries on energy policy, said in a monthly report world oil demand would rise by 1.21 million barrels per day (bpd) in 2016, down 150,000 bpd from last month's forecast.

"A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels - should international sanctions be eased - are likely to keep the market oversupplied through 2016," the Paris-based IEA said.

The Organization of the Petroleum Exporting Countries increased supply in September by 90,000 bpd to 31.72 million bpd, the IEA estimated.

The agency said it expected OPEC crude oil output to remain around 31.5 million bpd in coming months as Saudi Arabia and Iraq focus on market share.