IEA: Oil Supply Glut To Widen In 2016

According to the International Energy Agency, the world is oversupplied with oil by around 1.5 million barrels per day and this glut is only expected to expand.

The IEA estimated that in the near term the world will be oversupplied with 1.75 million barrels per day. The agency cited increased production from Iran by 80,000 barrels a day to 2.99 million, Iraqi volumes reaching a record of 4.35 million barrels per day and Saudi Arabia also ramping its output to 10.21 million barrels.

"With the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term," the IEA said in its monthly market report, according to Bloomberg. "In these conditions the short term risk to the downside has increased."

In addition to an increase in output, the IEA lowered its estimates for demand by 100,000 barrels per day in 2016 and expects usage to be unchanged at 95.6 million barrels a day.