The International Energy Agency said Thursday that a deal to freeze oil production by OPEC and non-OPEC producers will have a limited impact on supply and markets are unlikely to rebalance before 2017.

The IEA also said that even though a U.S. output decline was gathering pace and Iran wasn't adding as many barrels as expected, the world would still produce more oil than it consumes throughout 2016. 

The world has built record stocks over the past year in excess of 3 billion barrels. The IEA expects inventories to grow by 1.5 million barrels per day in the first half of this year.