The International Energy Agency (IEA) expects a perfect storm will push down oil prices. Global demand will fall, just as OPEC production rises. Oil prices, now below $60, could make their way back toward $40. Overall, the report is good news for the U.S. economy.

IEA analysts write:

Global oil demand growth slowing even as OPEC output at three-year high; OECD industry inventories surge to record

The IEA implied what the International Monetary Fund reported recently. The global economy has begun to slow:

World oil demand growth appears to have peaked in the first quarter at 1.8 mb/d and will continue to ease throughout the rest of 2015 and into 2016 as temporary support fades.

OPEC has good financial reasons for higher production:

OECD industry inventories hit a record 2 876 mb in May, up by a steep 38 mb. Product holdings led the build-up and by end-month covered 30.7 days of forward demand. Global supply and demand balances suggest that the rate of global stock increases quickened rapidly to an astonishing 3.3 mb/d during the second quarter.

Robust margins spurred stronger-than-expected OECD refinery runs, lifting second-quarter global throughput estimates to 78.7 mb/d. Global refinery throughputs are forecast to increase by a further 0.7 mb/d in the third quarter, with annual gains shifting to the non-OECD.

Gasoline prices should be back on their way to $2 a gallon.

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