International Energy Agency said Oil price may have shift

The International Energy Agency (IEA) has said oil prices are stabilising and could even begin to rise again now sees signs that the market may be balancing quicker than previously thought. The west’s energy adviser said: "Oil prices may have “bottomed out”.

 Oil prices have plummeted 70% since June 2014, falling as low as $27 per barrel earlier this year. The IEA said in a monthly report after a spectacular 2015, growth in global demand was slowing - with India and the Middle East being rare pockets of improvement.

 The IEA, which coordinates energy policies of industrialised nations, said it now believed non-Opec output would fall by 750,000 barrels per day (bpd) in 2016, compared with its previous estimate of 600,000 bpd. The IEA said: "Meanwhile, Iran’s return to the market has been less dramatic than the Iranians said it would be; in February we believe that production increased by 220,000 bpd and, provisionally, it appears that Iran’s return will be gradual."

Though the IEA still expects supplies to continue to outstrip demand until 2017, the agency now sees lower prices having a bigger effect on US shale companies. China, the world's second-biggest source of demand, will see growth of only 330,000 bpd this year, well below the 10-year average of 440,000 bpd. "For prices, there may be 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. It is clear that the current direction of travel is the correct one, although with a long way to go," the IEA added.