Oil prices may have 'bottomed out', says IEA

Oil prices may have bottomed as output in the US and other non-Opec producers is beginning to fall quickly and an increase in supply from Iran has been less than dramatic, the International Energy Agency said.

Output from non-Opec countries will decline by 750,000 barrels per day (bpd) this year, 150,000 more than the IEA estimated last month, it predicted. US production alone will fall by 530,000 bpd, it said.

“There are clear signs that market forces… are working their magic and higher-cost producers are cutting output,” the Paris-based IEA said.

It added that output from Opec fell by 90,000 bpd in February because of production outages in Nigeria, Iraq and the United Arab Emirates.

“Meanwhile, Iran’s return to the market has been less dramatic than the Iranians said it would be… it appears that Iran’s return will be gradual,” the IEA said.

Brent crude, which fell below $28 a barrel in mid-January, was trading 66 cents higher at $40.71 today.