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Global supply glut to persist in 2016 - IEA

FXStreet (Mumbai) - In its monthly report published on Tuesday, the Paris-based International Energy Agency (IEA) noted that the global supply glut is likely to persist and could extend by at least another year, anticipating the return of Iranian oil.

As Reuters reports, the IEA said global oil demand would increase by 1.21 million barrels per day (bpd) in 2016, down 150,000 bpd from its forecast last month.

The agency stated, "A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels – should international sanctions be eased – are likely to keep the market oversupplied through 2016."

The agency also noted that the global oil demand growth will revert to long-term trend levels of 1.2 million barrels a day in 2016, down from 1.8 million this year. Consumption worldwide will average 95.7 million barrels a day next year, about 100,000 a day less than projected in last month’s report.

While the agency boosted estimates for 2016 non-OPEC supply, it will still contract sharply next year. Total supply from nations outside OPEC will decline by 500,000 barrels a day. The US oil output will fall to 12.56 million barrels a day in 2016, from 12.75 million this year.

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