The global oil market will begin rebalancing in 2017 when US output declines further under pressure from low oil prices before resuming growth again later in the decade to reach an all-time high by 2021, the International Energy Agency (IEA) said.

"Only in 2017 will we finally see oil supply and demand aligned but the enormous stocks being accumulated will act as a dampener on the pace of recovery in oil prices when the market, having balanced, then starts to draw down those stocks," the IEA said in its medium-term outlook.

"Today's oil market conditions do not suggest that prices can recover sharply in the immediate future," it added.

In its report, the IEA said over the course of 2015 to 2021, US output is expected to reach an all-time high of 14.2 million barrels per day (bpd), after dipping initially this year and next.

Production of US shale oil, known as light, tight oil, is expected to drop by 600,000 bpd this year, and a further 200,000 bpd next year before gradually recovering.

Global oil supply is expected to rise by 4.1 million bpd between 2015 and 2021, compared with total growth of 11 million bpd over 2009-2015, the IEA said. – Reuters