A recent rise in oil prices is a “false dawn” and the oversupply of crude is set to worsen, according to the International Energy Agency (IEA).
Meanwhile demand for oil is expected to weaken. The IEA forecasts that demand growth will fall to 1.2 million barrels a day this year, from the 1.6 million barrels a day seen in 2015, the IEA said.
The think tank also questioned whether the recent rise in prices was a “false dawn” and concluded that a number of conditions increased the risk of weak oil prices.
These included doubts that Opec, the oil cartel, was in talks with other oil producing nations to reduce supply.
It also quashed speculation that Opec nations would cut output this year, stating that output from Iraq reached a new record in January. Iran has increased production ahead of sanctions being removed and preliminary data suggested that Saudi Arabia’s shipments too had increased.
