IEA Sees Oil Surplus Persisting Until Late 2017

The International Energy Agency (IEA) has revised its forecast for global oil markets, predicting that the surplus will persist into late 2017. This is a marked shift from the agency's previous prediction of a balanced market by the end of this year.

According to the IEA, world oil stockpiles will continue to accumulate through 2017, with consumption growth slumping to a two-year low in the third quarter. Demand faltered in China and India, while record output from OPEC's Gulf members contributed to the glut.

The agency trimmed its projections for global oil demand next year by 200,000 barrels a day to 97.3 million a day. It also reduced growth estimates for this year by 100,000 barrels a day to 1.3 million a day, citing a 'dramatic deceleration in China and India'.

OPEC's production rose slightly last month, with Saudi Arabia overtaking the US as the world's largest oil producer when non-crude forms like natural-gas liquids are included. The combination of faltering demand and increased OPEC output pushed oil inventories in developed nations to a record in July, at 3.1 billion barrels.