PARIS, France (AFP) — The International Energy Agency said Thursday that the global oil supply could grow faster than demand in the early part of 2018, but the market could balance out later in the year.

“On our current outlook, 2018 may not necessarily be a happy New Year for those who would like to see a tighter market. Total supply growth could exceed demand growth,” the IEA wrote in its latest monthly oil market report.

“A lot could change in the next few months but it looks as if the producers’ hopes for a happy New Year… may not be fulfilled,” the report said.

Nevertheless, looking at the year as a whole, there could be “a closely balanced market,” the IEA added.

At the end of November, 24 nations that account for around 60 per cent of the world’s oil supply agreed at a meeting in Vienna to keep a lid on output for all of 2018 in order to push up prices.

The aim of the deal — struck between the OPEC cartel and non-member countries such as Russia — is to reduce a global excess in supply that has pushed oil prices lower and left a huge hole in the finances of producer nations, despite making life easier for buyers of crude.

But increased production in the United States is driving faster growth in the global supply of oil, the IEA said.

“Just as the OPEC oil ministers were sitting down in Vienna, our colleagues in the US” released data showing that crude oil output in the US increased to its highest monthly average since April 2015, the IEA said.

The closure this week of the Forties pipeline network in the North Sea, which had been found to be leaking, “added momentum to Brent crude oil prices that have settled above $US60 (per barrel) since the end of October,” the IEA said.

“After the initial surge that understandably accompanies such a major supply disruption, the market has settled down again and, unless another dramatic event occurs in what remains of 2017, it looks as if the Brent crude price will average about $US54 (per barrel) for the year, an increase of 20 per cent on 2016,” the IEA said.

“For the producers at least, 2017 has been encouraging.”

On Wednesday, OPEC had predicted in its own monthly market report that supply and demand were likely to balance out by the end of 2018 thanks to a pick-up in demand, notably from the transport sector.