Crude oil price had its steepest weekly drop of 2015 to date after an economic report forecasts more doom and gloom for the ‘black gold’. The report released on Thursday by the International Energy Agency (IEA) pointed the ongoing crude oil volume glut in global markets and forecasted that it is weighing on demand levels. Nevertheless, oil producers have not reduced production down to levels that would subsequently reduce stockpiles.

The report released on a monthly basis by the IEA said that demand for crude oil during 2016 will slow down to 1.2 million barrels each day from the current level of 1.8 million. The ongoing strong production levels by the Organisation of Petroleum Exporting Countries (OPEC), in combination with Iran’s resume of oil supply into the markets from 2016 onwards, is projected to shoot up global inventories by more than 300 million barrels during next year. During November OPEC producers pumped 32 million barrels on a daily basis, more than any previous month since the beginning of 2009. However, the ongoing increase in oil production is certainly not in line with the global economic slowdown and hence the decrease in demand for raw materials.

While IEA’s estimates have not been hugely surprising to the markets, it is now more likely that crude oil bulls might not place their positions even on anticipation of a trend reversal. Many of them are waiting for the release of afundamental report by a large oil producer or energy agency that would signal the end of the ongoing price drop, but last week’s IEA report was just another sign that there could be a long way to go until that happens.

On a daily basis, the price of crude oil has increased only once during last week but otherwise had significant decreases that led to its sharpest weekly decline during this year. The oil’s downwards trend of last week was the latest move that contributed to the reduction of its price by more than a third since the beginning of this year and also affected the stock markets. Portfolio managers and other institutional investors gave up their crude oil asset holdings during the last few months in view of the persistently falling prices.