(Ecofin Agency) - The International Energy Agency (IEA) has kept its demand growth outlook for 2016 at 1.2 million bpd and expects consumption to rise at the same speed in 2017.

In its monthly oil market report, the IEA announced that the oversupply in the oil market may hit a third year in 2017 without an output cut from the Organization of the Petroleum Exporting Countries (OPEC). The group added that the rising production from exporters around the world could lead to persistent supply growth.

According to the group, global supply increased by 800,000 barrels per day in October to 97.8 million bpd, driven by an increase in OPEC output and rising production from non-OPEC members like Russia, Brazil, Canada and Kazakhstan. OPEC and non-OPEC members are to meets at the end of this month to discuss a production cut to a range of 32.5 to 33 million bpd. However disagreement among members regarding exemptions and production levels has increased doubt over the cartel’s ability to deliver a cut.

“Whatever the outcome, the Vienna meeting will have a major impact on the eventual – and oft-postponed – rebalancing of the oil market. If no agreement is reached and some individual members continue to expand their production then the market will remain in surplus throughout the year, with little prospect of oil prices rising significantly higher. Indeed, if the supply surplus persists in 2017 there must be some risk of prices falling back,” the IEA said.

Oil prices dropped on Friday as the market’s focus shifted from a surprising victory of Donald Trump to a persistent fuel supply projection. International Brent crude futures traded at $45.70 per barrel a decrease of 14 cents from their last close while U.S. West Texas Intermediate (WTI) crude futures were trading 29 cents lower at $44.37 per barrel.

The IEA said it expects non-OPEC production to increase at a rate of 500,000 bpd in 2017, compared with a 900,000-bpd drop this year, signifying that the market could see inventories increasing in 2017 if there is no cut.

Anita Fatunji