Oil price 'may have bottomed,' says IEA

Oil prices have recovered 50 percent from the 12 year lows reached in January, to now stand at around $40 (35 euros) per barrel.

In its monthly oil market report released on Friday, the IEA credited lower oil output in the United States and other countries as helping to shrink the global oil glut and nudge prices out of an 18-month rut.

One factor expected to drive an upward movement long-term is talk among OPEC states to freeze production amounts, which the IAE terms a "first stab at co-coordinated action." It warned that is would take several months before the outcome of negotiations was known, however.

Supply and demand balance

The agency also said that the impact of Iran's return to the market following the lifting of economic sanctions in January had been “less dramatic than the Iranians said it would be.

Furthermore, IEA pointed to supply disruption in Iraq, Nigeria and the United Arab Emirates, steady demand for oil and recent weakness of the dollar as other reasons supporting expectations for a price rebound.

Overall the report remained cautious and said that there was likely a long way to go before supply and demand found a real balance:

"For prices there may be a light at the end of what has been a long, dark tunnel, but we cannot be precisely sure when in 2017 the oil market will achieve the much-desired balance," the IEA said.

Oil prices have tumbled 70 percent since August 2014, falling as low as $27 (24 euros) per barrel earlier this year.

hch/cjc (AFP, dpa)