The International Energy Agency recently pointed to a remarkable recovery in oil prices and suggests that we may have already seen the bottom in oil prices. The Paris-based agency said that there are clear indications that market forces are "working their magic" and that higher cost producers are cutting output.
The result is that the level of excess global supply is beginning to fall, helping push prices higher. The agency now expects non-OPEC production to decline by seven hundred and fifty thousand barrels a day in twenty sixteen, twenty five percent more than its previous forecast.
Producers in the U.S. removed another one hundred and six oil rigs from service last month, bring the total rig count to seventy six percent below its October two thousand fourteen peak. Brazil, Columbia and Kazakhstan each slashed their production plans in February.
And as reported by CNNMoney, there are signs that Iran’s return to the oil market may be less dramatic than originally anticipated. That nation was hoping to ramp up production by 500,000 barrels a day immediately after nuclear sanctions were lifted early this year.
But International Energy Agency data indicate that Iran’s production increased by a bit more than 200,000 barrels a day last month.
