Oil prices literally plummeted on Tuesday evening, with Brent down nearly 8% in the last hours of trading, while WTI fared somewhat better with losses of 6%. IEA monthly reports showed that the worldwide inventory build looks set to continue for most of the year because it will take time for US oil production to decline and an agreement between OPEC and other producer countries to cut supply is unlikely.

The IEA held its supply and demand forecasts for 2016, it still expects global oil demand to grow by 1.2 million barrels per day and non-OPEC supply to decrease by 600,000 barrels per day. On the other hand, it has lowered its demand forecast for 2016, it is now likewise set to grow by 1.2 million barrels per day - previously a 1.4 million barrel per day increase had been forecast.

Significantly oversupplied oil market as suggested by IEA thus shows little scope for recovery in oil prices.