The International Energy Agency says global demand for oil will slow even further down next year, warning that the recent downward spiral in crude prices could continue.

“The bottom of the market may still be ahead,” the agency said in its new oil market report.

The IEA’s oil consumption report forecasts global oil demand will slow to 1.2 million barrels a day in 2016, down from an average 1.4 million barrels a day this year.

It warned that a return of Iranian oil and a potential Greek exit from the euro would increase the downward pressure on oil prices, which are down about 10 per cent in the past month.

The IEA - which advises industrialised nations on their energy policies - also said that if sanctions on Tehran were lifted, it could raise exports immediately from the 40 million barrels currently stored on its vessels.

The agency also noted that the Organisation of the Petroleum Exporting Countries continued to pump at high levels.

It estimated OPEC crude oil output was up to 31.7 million barrels a day - the highest level since April 2012 and 1.7 million barrels a day higher than a production target it agreed to maintain last month.

IEA says the rise was due to record production in Iraq, Saudi Arabia and the United Arab Emirates.