LONDON—Global oil inventories could rise sharply despite OPEC and its allies deepening their output cuts and slowing U.S. production growth, the International Energy Agency (IEA) said on Dec. 12.

“Despite the additional curbs ... and a reduction in our forecast of 2020 non-OPEC supply growth to 2.1 million barrels per day (bbl/d), global oil inventories could build by 700,000 bbl/d in Q1 2020,” the Paris-based IEA said in a monthly report.

OPEC and others including Russia—the OPEC+ group of producers—agreed last week to rein in output by an extra 500,000 bbl/d in first-quarter 2020 to balance the market and support prices, but they stopped short of pledging action beyond March.

Even if OPEC+ adhered strictly to their new pact and political troubles continued to hobble exports from Iran, Libya and Venezuela, the IEA said that only 530,000 bbl/d of crude would be withdrawn from the market compared to November production.

This contrasts with OPEC’s own research which forecasts a small deficit in the market next year due to Saudi Arabia’s supply restraint even before the latest cut agreement takes effect.

OPEC+ output is set to outstrip projected demand for its crude by 700,000 bbl/d in the first half of next year and by 1 million bbl/d in the second half, the IEA said.

The IEA lowered its forecast for supply growth by non-OPEC countries in 2020 by 200,000 bbl/d “on a continued slowdown in the U.S., reduced expectations for Brazil and Ghana as well as additional cuts by (OPEC’s allies).”

The biggest reduction is expected to be in U.S. shale output, where operators have been cutting spending under investor pressure to improve returns.

The IEA estimates total U.S. oil production growth will slow to 1.1 million bbl/d in 2020 from 1.6 million bbl/d this year.