The International Energy Agency (IEA) has released a report saying the world’s crude oil production has decreased for the first time since 2013.
The report said reductions by OPEC and non-OPEC countries led to cuts in global oil supply by nearly 800,000 barrels per day (bpd) in May. It said the current output stood at over 95 million bpd.
It added however that non-OPEC supply growth is expected to return in 2017 at 200,000 bpd.
The IEA said the drop comes despite Iran’s fast return to the OPEC oil market with an anticipated gain of 700,000 bpd.
The report sees the same growth for the global oil market next year, saying the 2016 growth of 1.3 million bpd will likely dominate 2017.
“We will see the same rate of growth and global demand will reach 97.4 million bpd. Non-OECD nations will provide most of the expected gains in both years. The growth rate is slightly above the previous trend, mostly due to relatively low crude oil prices,” it noted.
The IEA assessment follows a decline in prices as the US benchmark, West Texas Intermediate, for July delivery shed 39 cents to stand at $48.49 a barrel on Tuesday.
Also, Britain’s Brent North Sea crude for delivery in August was down 52 cents at $49.83 a barrel.
The IEA said the oversupply "is likely to dampen prospects of a significant increase in oil prices."
Crude prices recently rebounded from their January lows of under $30, and last month briefly pushed past $50 a barrel for the first time this year as the market gained support from production outages in Canada and Nigeria.