(Ecofin Agency) - The International Energy Agency (IEA) in its forecast for September said that a sharp decline in global oil demand growth, together with rising inventories and supply signifies that the crude oil market will be oversupplied through the first six months of 2017.

“Our forecast in this month's report suggests that this supply-demand dynamic may not change significantly in the coming months. As a result, supply will continue to outpace demand at least through the first half of next year,” it said.

The IEA had formerly expected no excess in the market in H2 of this year.“With our more pessimistic outlook for the second half of 2016 refining activity and revisions to crude supply, the expected draws in the third quarter of 2016 are now lower, while the build in the fourth quarter of 2016 is higher,” the IEA told Economic Times.

The Organization of Petroleum Exporting Countries (OPEC), on the other hand, increased its forecast for non-OPEC oil supply in 2017 by 350,000 bpd and also expects non-OPEC members to supply 56.52 million bpd to the market next year.This signifies that the global glut in the global market will continue.

Estimated non-OPEC supply in 2017 would increase by 200,000 bpd over this year. Next year’s non-OPEC supply will be increased by new production from the early coming on stream of the Kashagan field in Kazakhstan.For this year, non-OPEC oil supply is seen to reduce by 610,000 bpd, below what was previously expected and will average 56.32 million bpd, mostly caused by the lower-than-forecast drop in U.S. tight oil supply, better-than-expected Norwegian supply, and the early start-up of the Kashagan field.

OPEC’s crude oil output raised by 23,000 bpd from July to 33.237 million bpd in August.

Reuters’ survey at the beginning of this month had expected OPEC’s crude production to rise by 40,000 bpd in August to a record-high in recent times, with Saudi Arabia possibly setting a fresh output record.

OPEC slightly increased its forecast for 2016, by 10,000 bpd from the August’s monthly report, and expects the demand growth to increase by 1.23 million bpd, with total global demand at 94.27 million bpd.

OPEC’s 2017 world oil demand growth forecast was unchanged around 95.42 million bpd.

Anita Fatunji