In its monthly Oil Market Report for December released Thursday morning, the International Energy Agency (IEA) said that global crude supplies rose by 200,000 barrels per day in November to 97.8 million barrels per day, the highest level so far this year.

Production, however, is lower by 1.1 million barrels a day compared with November 2016 as OPEC supply fell sharply — 1.3 million barrels per day year over year — and total cartel output of 32.36 million barrels a day was 860,000 less than a year ago.

The IEA reports that global stockpiles dropped by 40.3 million barrels in October to 2.94 billion, the lowest level since July 2015. Inventories remain 111 million barrels above the five-year average however.

For all of 2017, the total demand forecast was unchanged at 97.7 million barrels a day, up by 1.5 million (1.6%) compared to 2016. For 2018 the IEA also reiterated its prior forecast for growth of 1.3 million barrels a day (1.4%) to a total of 98.9 million.

The agency has raised its forecast for U.S. crude oil production by 390,000 barrels a day for 2017 and by 870,000 for 2018. In September, the U.S. Energy Information Administration reported U.S. output rose by 290,000 barrels a day to nearly 9.5 million barrels a day, nearly a million more than 2016 production. Added to IEA projections for other non-OPEC producers, the agency notes that non-OPEC production could rise by 1.6 million barrels day, some 200,000 barrels more than IEA projected in last month’s report.

Here’s how the IEA sums it up:

So, on our current outlook 2018 may not necessarily be a happy New Year for those who would like to see a tighter market. Total supply growth could exceed demand growth: indeed, in the first half the surplus could be [200,000 barrels a day] before reverting to a deficit of about [200,000 barrels a day] in the second half, leaving 2018 as a whole showing a closely balanced market. A lot could change in the next few months but it looks as if the producers’ hopes for a happy New Year with de-stocking continuing into 2018 at the same [500,000 barrels a day] pace we have seen in 2017 may not be fulfilled.

Early Thursday morning, West Texas Intermediate crude for January delivery traded at $56.32 a barrel, down about 0.5% compared with Wednesday’s closing price of $56.60. Brent crude for February delivery traded down about 0.6% at $62.09 a barrel in London.

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