In its September report published on Tuesday, the International Energy Agency (EIA) said that global oil demand growth is slowing at a faster pace than initially predicted. The IEA had previously expected the market to show no surplus in the second half of this year.
The IEA sharply cut its forecast for global oil demand for this year and the next amid what it called “wobbling” Asian demand. IEA downgraded its global oil demand predictions by about 100,000 barrels a day for this year. Report showed that for 2016, IEA expects a gain of 1.3 mb/d.
"Supply will continue to outpace demand at least through the first half of next year. Global inventories will continue to grow: OECD stockpiles in July smashed through the 3.1 billion barrel wall. As for the markets return to balance - it looks like we may have to wait a while longer." said IEA in its report.
IEAs report which showed a bleak picture of the global demand scenario is set to intensify the debate between oil producers later this month in Algiers about whether they should freeze their production.