IEA official warns oil glut will continue until late 2017

Global oil output will exceed demand until late 2017, the head of the International Energy Agency (IEA) said before major producing nations gather for talks. “We don’t see the oil market rebalancing until late 2017” provided there’s no “major intervention,” IEA executive director Fatih Birol said yesterday in an interview with Bloomberg Television in Algiers. The Paris-based agency is extending its bearish view after saying September 13 that oil supply will outpace demand “at least through the first half of next year.”

Organisation of Petroleum Exporting Countries (Opec) members will hold informal discussions in the Algerian capital today as they seek to buoy prices following two years of decline amid brimming global stockpiles. Oil-demand growth has been weaker than expected, Birol said. The IEA this month cut its forecast for consumption growth in 2016 and 2017, citing a “marked slowdown” in India and China.

The agency, which advises industrialised countries on energy policy, projected demand growth of 1.3 million barrels a day in 2016, down from 1.6 million a day in 2015. Its prediction slips to 1.2 million a day next year. Opec, which produces roughly 40 per cent of the world’s oil, is unlikely to take a formal decision on supply in Algiers, postponing it until the group’s next official meeting in two months.