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The International Energy Agency said on Tuesday that oil markets may not re-balance until 2017 as demand growth weakens amid swelling oil inventories.

The agency said in its latest oil market report that global oil demand growth is slowing at a faster pace than initially anticipated.

The agency now expects global oil demand to grow by 1.3 million barrels per day this year, a 100,000 bpd dip from the agency’s previous forecast.

The IEA said the downgrade is tied to a “more pronounced” third quarter slowdown.

Global oil demand growth is expected to slow further in 2017 to 1.2 million bpd due to uncertain macroeconomic conditions.

World oil supplies fell by 300,000 bpd in August thanks to a decline in non-OPEC production.

Global oil output fell to 96.9 million bpd last month, a 300,000 bpd decline from the same period last year.

However, the IEA said that near-record OPEC supply “just about offset steep non-OPEC declines. ”

Non-OPEC supply is expected to post an 840,000 bpd decline this year before growing by 380,000 bpd in 2017.

OPEC crude production ticked up to 33.47 million bpd in August, “testing record rates as Middle East producers opened the taps,” the IEA said.

Kuwait and the United Arab Emirates saw their output levels climb to record highs last month.

Saudi Arabia’s output held near a record high while Iran’s output hit its highest level since Western sanctions were officially lifted in January.

Overall, OPEC supply climbed by 930,000 bpd year-over-year in August.

OECD total inventories built by 32.5 million barrels in July to a new record high of 3.111 billion barrels.

The agency said that oil inventories in OECD countries are still “swelling to levels never seen before.”

The IEA said that refinery runs are expected to grow at the lowest rate in a decade this year.

“As refinery activities reached a summer peak, crude oil inventories refused to decline until an exceptional storm-related draw hit the US in late August,” the IEA said.

The agency expects refineries to process only an additional 100,000 bpd of crude this year compared to year ago levels.

“Refiners are clearly losing their appetite for more crude oil,” the IEA said.

The agency said that its forecast suggests that the current trend of low demand growth and rising production “may not change significantly in the coming months.”

The IEA now expects that oil supplies will continue to outpace demand at least through the first half of 2017 as global production expands, albeit at a slower pace than seen in 2015.

As oil continues to hover around the $50 per barrel mark, the stimulus effect tied to cheap fuel appears to be fading, the report said.

Slowing demand growth in China and India, slowing economic momentum in the United States and the decline of “unexpected gains” from Europe are also dampening demand.

While the IEA had expected prolonged low oil prices to shrink supplies and stimulate demand the agency said the “opposite now seems to be happening.”

“As for the markets return to balance – it looks like we may have to wait a while longer,” the agency said.