Global production of crude oil will fall behind demand in the third quarter of this year as the current oversupply that has fueled the oil price slump clears out, according to the International Energy Agency.

The Paris-based organization predicted in its Oil Market Report for August that output is likely to lag demand by almost one million barrels a day from July to September even as OPEC producers pump at record or near record levels.

“Our balances show essentially no oversupply during the second half of the year,” the IEA said.

As The Wall Street Journal reports, “A lack of an oversupply would eliminate a central truth of the oil market for the past two years, when prices collapsed because of a flood of new crude from places like the U.S. and Canada and ramped up production in traditional producers like Saudi Arabia and Iraq.”

The disappearance of the glut is due to deep output cuts by non-OPEC producers and healthy global demand for crude oil, the IEA said. In North and South America alone, crude production is projected to fall by 700,000 barrels a day in the third quarter of 2016, compared with the first quarter.

OPEC producers, meanwhile, have been producing more oil, with the IEA putting Saudi output at 10.6 million barrels a day, beating its previous record last summer. Kuwait and the United Arab Emirates also set records in July.

“Saudi Arabia and OPEC once favored keeping prices high through production cuts but have decided in the past two years to instead keep the spigots on full blast and compete for oil buyers — a decision that fueled the glut,” the WSJ noted.

For next year, the IEA lowered its forecast for demand growth by 100,000 barrels per day, to 1.2 million bpd, which would represent a slowdown from this year’s forecast growth of 1.4 million bpd.

“The massive overhang of stocks is … keeping a lid on prices, with both newly produced and stored crude competing for market share in an increasingly volatile refinery margin environment,” the IEA said.

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