With global oil demand in 2016 set to grow faster than previously forecast and supply growth from outside Opec continuing to slow, mainly down to the slide in oil prices to around half of year-ago levels, Opec believes world oil markets will begin a gradual return to balance next year. But despite forecasting a contraction in non-Opec supply for the first time since 2008, the International Energy Agency (IEA) is more cautious: it still expects the current oversupply in oil markets to continue through both this year and the next.

“While a rebalancing has clearly begun, the process is likely to be prolonged as a supply overhand is expected to persist through 2016 — suggesting global inventories will pile up further,” the Paris-based OECD energy watchdog says in its latest oil market commentary out on 12 August. (CONTINUED - 1093 WORDS)