Oil prices fall; IEA predicts return of oversupplied markets despite OPEC’s cut

Oil prices fell on Monday in Asia after the International Energy Agency (IEA) said it expects the return of an oversupplied market next year.

U.S. Crude Oil WTI Futures were down 0.3% to $60.05 by 11:48 PM ET (03:48 GMT). International Brent Oil Futures slipped 0.1%.

In a closely-watched report, the IEA said oil supply in the first half of 2019 had exceeded demand by 0.9 million barrels per day.

“This surplus adds to the huge stock builds seen in the second half of 2018 when oil production surged just as demand growth started to falter,” the energy agency said on Friday.

The news came after OPEC and its allies renewed an oil production cut agreement until March 2020.

“The widely-anticipated decision by OPEC+ ministers to extend their output agreement to March 2020 provides guidance but it does not change the fundamental outlook of an oversupplied market,” the IEA said.

In other news, Tropical storm Barry, which cut oil production in the Gulf Coast of Mexico by more than half, remained in focus after the U.S. Bureau of Safety and Environmental Enforcement said Sunday that the storm has halted 73% of crude oil production in the U.S.-regulated areas of the Gulf of Mexico. Oil prices gained last week amid the disruptions caused by the storm.