LONDON – World oil demand is growing at its fastest pace in five years thanks to rebounding economic growth and low prices, but global oversupply is so great that it will last through 2016, the West’s energy watchdog said on Wednesday.
The International Energy Agency (IEA) said oil supply was continuing to grow “at a breakneck pace” but U.S. oil producers were beginning to suffer from low oil prices and output was “likely to take a hit soon”.
“While a rebalancing has clearly begun, the process is likely to be prolonged as a supply overhang is expected to persist through 2016 – suggesting global inventories will pile up further,” the IEA said in its monthly report.
The agency, which advises the world’s biggest economies on energy policy, raised sharply its estimates for world oil demand growth this year and in 2016.
Higher demand would push up the need for oil from producers in the Organization of the Petroleum Exporting Countries.
The IEA increased its forecast of demand for OPEC crude oil plus stocks in 2016 by 600,000 barrels per day (bpd) to 30.8 million bpd. It also raised its forecast for demand for OPEC crude this year by 200,000 bpd to 29.5 million bpd.
(Reporting by Christopher Johnson and Dmitry Zhdannikov)
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