A global oil glut that has sent prices tumbling is set to “shrink dramatically” later this year, as wildfires have disrupted Canada’s output and demand in India soars, the International Energy Agency (IEA) said Thursday.
Demand for oil worldwide is set to grow at a “solid” rate in 2016, with India as the “star performer”, the 29-nation IEA said in its monthly report, adding to it they believed “the global supply surplus of oil will shrink dramatically later this year”. “This provides further support for the argument that India is taking over from China as the main growth market for oil,” the 29-nation IEA said in its monthly report. The oil market has for months been depressed by a vast oversupply. Oil prices surged to six-month highs this week and are now well over USD 46 a barrel after plummeting below USD 30 early in the year. They are nevertheless far below the USD 100-a-barrel mark of mid-2014. But the IEA said it believed “that the global supply surplus of oil will shrink dramatically later this year”.