Investing.com – Oil inventories may not fall to desired levels until the first quarter of next year, the International Energy Agency said Wednesday.
OPEC and non-OPEC producers have agreed to cut output by 1.8 million barrels a day.
The agreement was extended in May by another nine months until March of next year.
The accord aims to reduce inventories to the average of the past five years.
If the accord holds, “stocks might not fall to the desired level until close to the expiry of the agreement,” the IEA said.
In its monthly report, the IEA noted higher output by Libya and Nigeria.
It said Libyan output is near 800,000 barrels per day, a level not seen since 2014.
This dilutes the impact of the output cut accord, slowing the re-balancing of the market, the agency said.
The IEA expects OPEC stocks to be little changed.
But it sees a rise in U.S stocks as domestic production increases.
U.S. crude supply is expected to end the year up 920,000 barrels per day from the end of 2016.
It is seen rising by a further 780,000 barrels a day next year.