According to the authority, non-OPEC production in 2018 will increase by 1.5 million barrels daily - a rate that will surpass the growth of global demand. More than half this growth will come from the USA, which the IEA expects to increase production by 430,000 B/D in 2017 and 780,000 B/D in 2018.
Commercial crude oil inventories also fell less than projected, highlighting weak demand even as the US enters its summer driving season, when many vacationers take to the roads.
Due to projections of lower oil productions, the EIA reports that the responsiveness of the United States to global oil production may ultimately mean a greater supply in the country for 2018. By its estimates, total crude oil inventories in industrialized economies are 292,000 barrels above the five-year average.
While a fall in the price of any commodity normally sparks an increase in demand, Fesharaki told CNBC that "A drop in the price of oil is like an natural disaster or a tsunami" that actually could dampen demand.
OPEC and other producers have agreed to restrict output and cut production by 1.8 million bpd to March next year to soak surplus crude from the market.
"The rebalancing of the market is underway, but at a slower pace", the report said, acknowledging it will take more time to tighten the supply-demand balance. OPEC, a group of 13 oil producing nations, decided on November 30 to cut global crude oil output by 1.2 million barrels per day.
Rising non-Opec output has dented Opec and its allies' global pact to reduce oversupply in the market, which has pressured prices for almost three years.
"Oil is unlikely to find solace into the weekend either, with tonight's Baker Hughes Rig Count expected to deliver its now weekly increase of operational rigs", said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.