Oil prices might have bottomed as production declines in the United States and other non-OPEC producers are accelerating and an increase in supply from Iran has been less than dramatic, the International Energy Agency said on Friday.
The IEA, which coordinates energy policies of industrialized nations, said it now believed non-OPEC output would fall by 750,000 barrels per day in 2016 compared to its previous estimate of 600,000 bpd, Reuters reported.
US production alone would decline by 530,000 bpd this year, it said. “There are clear signs that market forces ... are working their magic and higher-cost producers are cutting output,” the Paris-based agency said.
Oil prices hit their lowest since 2003, below $30 per barrel, in January on a supply glut stemming from booming US output in recent years and a decision by OPEC to ramp up supply to fight for market share against higher-cost producers.
Prices have since recovered to $40 after the Organization of the Petroleum Exporting Countries’ de facto leader, Saudi Arabia, and top non-OPEC producer Russia said they could freeze output.
