IEA sees slowdown in global oil demand growth, surplus to last into H1 2017

LONDON: A sharp slow-down in global oil demand growth, coupled with ballooning inventories and rising supply means the crude market will be oversupplied at least through the first six months of 2017, the International Energy Agency said on Tuesday.

"Our forecast in this month's report suggests that this supply-demand dynamic may not change significantly in the coming months. As a result, supply will continue to outpace demand at least through the first half of next year," the IEA said.

The IEA had previously expected the market to show no surplus in the second half of this year.

Global refinery runs are expected to grow at their slowest pace in at least a decade this year, which will curb appetite for crude oil, just as inventories across the developed nations rose to a fresh record high of 3.111 billion barrels, the report said.

"With our more pessimistic outlook for the second half of 2016 refining activity and revisions to crude supply, the expected draws in the third quarter of 2016 are now lower, while the build in the fourth quarter of 2016 is higher," the IEA said.