Supply and demand in the oil market are close to matching up, the IEA said on 13 April, as landmark OPEC-led production cuts are mitigated by rising US supply and slipping worldwide demand growth
The compliance rate with the agreement among OPEC members and some non-members, including Russia, "has been impressive", the International Energy Agency (IEA) said in its monthly oil market report, lifting the global oil prices.
But oil at above US$50 a barrel has attracted higher-cost producers in the United States back to the market, and excessive American drilling will push non-OPEC supply to surprisingly high levels throughout the year, the IEA predicted.
"It can be argued confidently that the market is already very close to balance, and as more data becomes available this will become clearer," it said in the report.
"Although the oil market will likely tighten throughout the year, overall non-OPEC production, not just in the US, will soon be on the rise again," it said.
At the end of November, OPEC agreed to cut output by 1.2 mn bpd from 1 January 2017 initially for a period of six months.
Then in December, non-OPEC producers led by Russia agreed to cut their own output to 558,000 bpd. The aim was to reduce a glut in global oil supply that had depressed prices. Reports in April 2017 said that OPEC major player, Saudi Arabia, is pushing the other OPEC producers to extend the agreement by another six months at their meeting in May 2017.