A surprise increase in U.S. oil supply as reported by the American Petroleum Institute as well as a report on increased shale oil production from the International Energy Agency(IEA) has the oil market acting loopy. The International Energy Agency (IEA) predicted that oil supply would outstrip demand next year, with output increases from U.S. shale producers.

The International Energy Agency (IEA) rattled the crude oil market by reporting that U.S. oil production will surge to the highest levels since 2014. The IEA said it expects U.S. crude supply to grow by 430,000 barrels a day this year, and will grow by 780,000 barrels a day in 2018, slowing down the global oil market rebalancing. Even as OPEC has record compliance to production cuts yet they report that OPEC crude oil output rose by 29,000 barrels a day in May to 32.08 million barrels a day, the highest level so far this year. This was led by Nigeria, Libya and Iraq.

The IEA also reported that globally stored oil increased by 18.6 million barrels in April in industrialized nations. Those inventories were 292 million barrels higher than the five-year average.

IEA says that, “Our first outlook for 2018 makes sobering reading for those producers looking to restrain supply,” the Paris-based energy watchdog said in its latest monthly oil market report. The IEA said the weak demand growth in the first half of fewer than 1 million barrels per day would accelerate in the second half so that demand overall for the year would average 1.3 million barrels per day, and grow further next year to 1.4 million bpd. The IEA cut its forecast for supply-demand deficit in the second half of this year from 700,000 bpd to 500,000 bpd.

The API reported a big time drop in supply last week and seems to be adjusting upward their supply number, increasing it by 2.8 million barrels even as they report an 850,000 barrel drop in Cushing, Oklahoma supply. Still the increase in supply, breaking the API’s 9-week drawdown, is raising concerns as to whether the U.S. oil market is going to continue to see a drop in oil and overall supply.