IEA: Crude prices will get lower as oil surplus stay longer than expected

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Oil prices have fallen on Tuesday after the International Energy Agency (IEA) changed its view on global oversupply. The Agency expects that global glut will persist longer into 2017 than it has been previously predicted.

The experts explain that oil surplus will stay longer due to declining global demand and resilient output. At the same time Bloomberg has counted that U.S. crude supplies rose by four million barrels last week.

“The IEA said the supply overhang will persist longer than previously expected,” said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Conn. “Also, there are expectations that U.S. inventories will post a big build as all the imports that were delayed (due to disruptions from a tropical storm) arrive.”

Oil prices have been fluctuating in August due to speculations over the coming meeting of OPEC countries later this month. In September the largest oil producers are going to discuss the possible output freeze. Rising OPEC production has offset the effect of declining supplies elsewhere, maintaining the oversupply, the IEA said.