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A woman stands at a petrol pump at a Chevron gasoline station in Los Angeles,California April 11, 2011.

(Reuters) The global oil glut will swell until late 2017, the U.S. government forecast on Tuesday in an outlook that offered little hope of near-term relief for energy producers reeling from the collapse of crude prices to 12-year lows around $30 a barrel.

Increased Iranian oil output should feed the global glut this year with the expected lifting of Western sanctions on that country’s exports, the U.S. Energy Information Administration said. The agency forecast that a limited decline in U.S. supplies next year and steady growth in global demand will help ease the glut only in the third quarter of 2017, the first decline after nearly four straight years of gains.

In its first forecast for 2017, the EIA said global oil production would likely rise to nearly 96.7 million barrels per day from more than 95.9 million bpd this year. Demand would grow by only 1.4 million bpd in 2017, the same rate as 2015 and 2016. U.S. production, now expected to decline by 700,000 bpd this year to 8.7 million bpd, will fall by a slower rate in 2017 to about 8.5 […]