In May, the world’s largest oil producers agreed to extend their output cut deal into 2018. OPEC and 11 non-OPEC members, including Russia, signed the deal, but their efforts failed to impress markets. Brent fell almost 4 percent following their decision.

According to the IEA, crude prices dropped by about $1.50-2.50 a barrel on average in May, but more steeply after OPEC countries decided to extend their output deal, “reflecting lower expectations about the pace of global market rebalancing,” the IEA said in the report.

Oil prices moved slightly lower early on Wednesday following an OPEC report also detailing that overall production rose in May.

Nonetheless, the IEA has forecast that oil demand is set to increase in 2018 albeit modestly.

“Demand averages 97.84 thousand barrels a day in 2017, rising to 99.27 thousand barrels a day in 2018 and breaching the psychologically important 100 thousand barrels a day threshold in the fourth quarter of 2018,” the IEA said.