The global demand for oil is expected to slow down by next year, the International Energy Agency, IEA, has projected in its November Oil Market Report (OMR), a monthly publication which provides a view of the state of the international oil market and projections for oil supply and demand 12-18 months ahead.

In the Report, the IEA said global demand growth is expected to lose traction to 1.2 million barrels per day (mb/d) in 2016 after surging to a five-year high of 1.8 mb/d in 2015.

“Momentum will ease towards its long-term trend as recent props – sharply lower oil prices, colder-than-year-earlier winter weather and post-recessionary bounces in some countries – are likely to give way,” the Report said.

Read the rest of the release below:

Global oil supplies breached 97 mb/d in October, as non-OPEC output recovered from lower levels the previous month. Despite the resilience of producers such as Russia, non-OPEC supply is forecast to contract by more than 0.6 mb/d next year. US light tight oil (LTO), the driver of non-OPEC growth, is expected to decline by 0.6 mb/d in 2016.

OPEC crude supply held steady in October at 31.76 mb/d, with declines in Iraq and Kuwait offset by higher supply from Libya, Saudi Arabia and Nigeria. A slight tightening in fundamentals lifts the 2016 "call" on OPEC by 0.2 mb/d from last months' OMR to 31.3 mb/d.

OECD commercial inventories rose counter-seasonally by 13.8 mb to stand at a record near-3 billion barrels by end-September. The pace of global stock building slowed during the third quarter to 1.6 mb/d from 2.3 mb/d in the second quarter but remained significantly above the historical average.

Global refinery runs sank by 1.2 mb/d in October to 78.2 mb/d with seasonal maintenance in full swing, leading to a significant reduction in annual throughput growth. Margins edged lower in October versus September but remained robust despite high product stocks.

The November OMR features an outlook for European winter weather and its likely effects on heating demand as well as a focus on OECD stock levels for middle distillates. A third article available to OMR subscribers details Iraq's advances in the European market; a fourth examines the implications of US President Barack Obama's rejection of the Keystone XL pipeline while a fifth looks at the heavy reliance on Gulf of Mexico output for US supply growth. This month's issue concludes with the opportunities and challenges for European refiners in the wake of the revelations of inaccurate diesel emissions.