The International Energy Agency (IEA) has forecast slower global oil demand growth next year following the recent slide in prices towards $40 a barrel.
In its August report, the IEA estimated demand growth would slow from 1.4 million barrels per day in 2016 to 1.2 million bpd in 2017, 0.1 million bpd below its previous expectations, due to a “dimmer macroeconomic outlook”.
The organisation also blamed recent declines in oil markets from above $50 in June on falling demand growth from the US, China and India and a continued global supply glut.
Prices declined following the report, with international crude benchmark Brent dropping to $43.64, before again rising to $44.25.
Global supply increased by 0.8 million bpd in July due to higher OPEC and non-OPEC production, according to the organisation.
However, output was 215,000 bpd lower than a year earlier despite a 840,000 bpd annual gain from OPEC producers due to declines in non-OPEC output.
It forecast non-OPEC production would drop by 0.9 million bpd this year before rebounding by 0.3 million bpd next year.
OPEC crude output rose by 150,000 bpd in July to 33.39 million bpd as Saudi Arabia pushed output to its highest ever level and Iraq increased production.
Total OPEC production pushed OPEC crude supply 680,000 bpd higher than July last year and maintained an eight-year high, according to the agency.
Looking ahead, the IEA said third quarter throughput is expected to rise by 2.2 million bpd to 80.6 million bpd.
But it forecast this growth, at only 0.6 million bpd above the previous year, would mean third quarter runs were below demand growth, eroding some excess supply.
“Runs are forecast to decline seasonally to below 80 million bpd in the fourth quarter of 2016,” the IEA said.