Oversupply conditions continue to dominate the outlook for crude oil markets, with increasing inflows from Iran and Iraq. There has been a multi-year build-up in the output capabilities of non-OPEC energy producers, led by U.S. shale and Canadian heavy oil producers.

There will be little short-term relief with global production getting an added boost from Iran and other Middle Eastern and African countries in need of expanded revenues. Inventories of unsold crude are at a record on land and on the sea in tankers.

On the flipside, the demand for energy products is rising, led by strengthening in demand from India, China, and the United States. But it will require much stronger global economic growth to lift crude oil prices higher on a more sustained basis. Although oil production in the U.S. is being reduced, even larger output cutbacks will be needed to rebalance the oil market.