Oil prices may have passed their lowest point, as shrinking supplies outside the Organization of Petroleum Exporting Countries and disruptions inside the group erode the global surplus, the International Energy Agency said.
Production outside OPEC will decline by 750,000 barrels a day this year, or 150,000 barrels a day more than estimated last month, the agency said.
“There are signs that prices might have bottomed out,” the IEA said in its monthly market report on Friday. “For prices there may be light at the end of what has been a long, dark tunnel” as market forces are “working their magic and higher-cost producers are cutting output.”
Oil prices have recovered 50 percent from the 12-year lows reached in January as U.S. shale production retreats and as some OPEC members led by Saudi Arabia reached a tentative accord with Russia to maintain output at current levels. This “freeze” deal, while currently supporting prices, is unlikely to have a substantial impact on markets in the first half of the year, the IEA said.
Read more: Bloomberg