© Reuters. IEA says oil stockpiles to keep ballooning this year, price recovery unlikely

Investing.com - Oil stockpiles are expected to continue to increase this year, the world’s leading energy body said on Tuesday, meaning that prices are unlikely to rise significantly from current levels.

The International Energy Agency, which advises industrialized countries on energy policy, said in its monthly report that global excess supply may reach 2 million barrels per day during the first quarter and a further 1.5 million barrels a day in the second quarter.

Further stock-building of 300,000 barrels a day is forecast in the second half of the year.

“If these numbers prove to be accurate, and with the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term" the IEA said.

As well as “brimming stockpiles” the IEA said a stronger dollar will add to downward pressure on oil prices.

Supply may still exceed demand this year and with slowing growth in Europe, China and the U.S. global oil demand is forecast to ease considerably in 2016 the report said.

The IEA said declines in U.S. output are likely take time and added that the Organization of Petroleum Exporting Countries is unlikely to reach an agreement with other producers to cut output.

"Persistent speculation about a deal between OPEC and leading non-OPEC producers to cut output appears to be just that: speculation. It is OPEC's business whether or not it makes output cuts either alone or in concert with other producers but the likelihood of coordinated cuts is very low," it said.

prices have fallen sharply over the past 18 months to below $30 a barrel amid fears that the largest supply glut in decades is coinciding with slowing global demand.