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Rashid Husain Syed is a journalist, energy analyst and consultant based in Toronto. For almost 25 years, he served as vice-president of a leading Saudi trading and consulting house.

The crude glut is here to stay – and both the Organization of Petroleum Exporting Countries and the International Energy Agency now concur, in sharp contrast with their earlier estimates.

On Monday, OPEC flipped its forecasts to project an increase in non-OPEC output of 200,000 barrels a day next year, versus the 150,000-b/d decrease it was forecasting just last month.

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In its September Monthly Oil Report, the Vienna-based organization said the United States, Russia and Norway will produce 190,000 b/d more in 2016 than projected earlier, confirming that the non-OPEC production has remained resilient despite low market prices.

This means global supplies will outstrip crude demand by about 760,000 b/d, making the glut three times higher than OPEC projected in August. With the United States adding 77 rigs over the past couple of months, the decline in U.S. output has slowed, while Norwegian output is up 4 per cent.

And in 2017, production from outside OPEC is expected to surge further – after years of delay, the giant new field in Kazakhstan is set to start production and U.S. shale output is recovering, the report emphasized.

Contributing to the continued glut and hindering the rebalancing of the markets is the global crude stockpile. Despite expectations of depletion in recent weeks, the global stockpile continued to be above its five-year average through July at 341 million barrels.

As a consequence of the hikes in non-OPEC output, OPEC has cut the call on its crude in 2017 by 500,000 b/d to 32.5 million b/d. This is considerably below current OPEC output. Member countries pumped 33.24 million b/d in August, according to external sources compiled by the organization.

Meanwhile, the International Energy Agency, the Organization for Economic Co-operation and Development's energy watchdog, is also projecting that the glut is set to continue beyond 2016, as demand for oil slows more quickly that it previously anticipated.

In its September report, the IEA reduced its forecast for demand growth by 100,000 b/d for this year to 1.3 million b/d, and further to 1.2 million b/d next year, while supply is set to rise again next year. The IEA also points to the growth in non-OPEC output next year. "Non-OPEC supply is expected to return to growth in 2017 (up 380,000 b/d) following an anticipated 840,000-b/d decline this year," it reported.

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The IEA is also wary of the ominous clouds on the global economic horizon, noting that Europe's unexpected gains have vanished, U.S. momentum has slowed dramatically and the recent "pillars of oil demand growth – China and India – are wobbling."

The IEA said it's now clear that this year's second-quarter boost that lifted oil demand growth to 1.4 million b/d over last year has slowed dramatically in the third quarter to just 800,000 b/d.

As a result, the IEA stressed, supply will continue to outpace demand at least through the first half of next year. Global inventories will continue to grow, and "it looks like we may have to wait a while longer" for markets to balance.

This is a dramatic change in the IEA's tone and tenor. Until recently, it was confident the markets were returning to balance. In April, after meeting Japanese Prime Minister Shinzo Abe, IEA executive director Fatih Birol said that: "When we look at all the fundamentals – demand, supply and stocks – I have all the reasons to believe that in the absence of a major economic downturn, we are going to see balance in the markets latest by 2017."

In its Monthly Oil Report for May, the IEA reiterated that the global oil markets were heading toward a long-awaited equilibrium. It repeated the same message in June: Increasing Asian demand and worldwide disruptions to oil production could eat away the glut by the end of 2016. In August, it predicted that global oil markets would continue to rebalance this year as the pickup in demand from refiners absorbed the record output from several Persian Gulf producers.

Now, those sentiments have changed, and rather dramatically.

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All this puts OPEC in a quandary. Despite low market prices, non-OPEC output continues to grow. And this raises the question: Is OPEC winning this round of the battle for market share?

At the moment, it appears not.

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