In a report published on June 14, the International Energy Agency (IEA) has estimated that global oil consumption will be higher than expected in 2016 and 2017 as oil production slumps. With this, the market should recover its balance in the second half of this year.

Throughout 2016, the global demand for oil should grow by 1.3 million barrels per day (mbdp) against a previous forecast of 1.2 million barrels per day, to 96.1 million barrels per day, said the agency, which is related to the Organisation for Economic Cooperation and Development (OECD), in its monthly oil report. “This growth rate is slightly higher than the previous trend, mainly because of low oil prices that spur consumption, in the USA especially,” it said.

In 2017, the demand should keep this trend and grow by 1.3 mbpd to 97.4 mbpd, mainly because of non-OECD members and most especially because of India, South Korea and China.

Meanwhile, oil output remains down. This should lead to “a more balanced oil market” during the second half of 2016 given that this market was lagged by an excess supply for almost two years.

A slight increase is however projected in 2017, after Canada restarts production. Moreover, IEA has noted that the impact of a balanced oil market on prices should be limited, as significant stocks are yet to be cleared.

Over the past months, oil prices have surged noticeably, from $27.1 a barrel in January to close to $50 now.