Stronger than expected demand plus unexpected supply outages lead the IEA to expect a market in balance sooner, now in 2H16:
https://www.iea.org/oilmarketreport/omrpublic/
“In January, we estimated that the surplus of supply over demand in 1H16 would be 1.5 mb/d. Today, with all the usual caveats about data revisions to come, it looks as if the figure is about 0.8 mb/d. Between January and today two main factors have transformed the outlook: first, oil demand growth has been significantly stronger than we expected. Firm data for 1Q16 shows year-on-year growth of 1.6 mb/d versus an initial expectation of 1.2 mb/d. Accordingly, we have slightly increased our demand growth number for 2016 as a whole to 1.3 mb/d.
The second main factor to transform the outlook has been unexpected supply cuts. Canada’s wildfires at their peak removed up to 1.5 mb/d of production capacity; in Nigeria, militant action has forced production down to thirty-year lows; and Libya remains a long way from significantly increasing its production despite occasional signs of optimism. Canada’s shut-in production will fully return in the near future but the troubles in Nigeria and Libya look to be long-standing. This current list of shut-ins might soon be augmented by Venezuela where the deteriorating situation could affect the operations of the oil industry.”
“…assuming no further surprises, in 2H16 we expect the oil market to be balanced, with a small stock draw in 3Q16 offset by a small stock build in 4Q16.”
In a recent meeting, the IEA chief stated that crude oil supply and demand will reach equilibrium in 2017.
The reasons for this are a reduction in demand growth, mainly because of weaker Chinese and European data, and an increase in global supply.